SINGAPORE, Sept 11 (Askume) – Asian shares fell and U.S. stock futures dropped on Wednesday after Democratic Vice President Kamala Harris and Republican Donald Trump clashed during the much-anticipated U.S. presidential debate.
The presidential candidates discussed abortion, the economy, immigration and Trump’s legal issues in the first debate .
This kept investors cautious ahead of Asian trade as markets also await US inflation data , which could influence Federal Reserve’s policy moves next week.
MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 0.25%, S&P 500 futures lost 0.38%, and the dollar also fell.
Harris’ late entry into the presidential race after President Joe Biden dropped out in July has made the race even more intense.He was asked to reverse agreements made in anticipation of Trump’s second term as president .
Although the debate is unlikely to have any impact on short-term monetary policy, investors are paying attention to the candidates’ fiscal policy and economic plans.
“I don’t think the markets are making a lot of sense here,” said Rob Carnell, ING’s head of Asia-Pacific research. “I think Harris handled Trump well.”
“You would expect that if he (Trump) performs better, you would see the dollar strengthen as a result. So I think that’s the way the market is looking at it. It’s kind of leaning towards Harris.”
The US dollar index, which measures the greenback against its six peers, fell 0.21% to 101.43 during Asian time.
Japan’s Nikkei fell 0.8%, and Chinese stocks dropped again. The Shanghai Composite Index (.SSEC) fell 0.75% and the blue-chip index (.CSI300) fell 0.16%. Hong Kong’s Hang Seng Index fell 1%.
Keep an eye on inflation
Investors’ attention will soon turn to Wednesday’s US Labor Department consumer price index report for policy cues, though the Federal Reserve has made it clear the focus is more on employment than inflation.
A Askume survey shows core CPI is expected to have risen 0.2% on a quarterly basis in August, the same as the previous month.
While the Fed is widely expected to cut interest rates next week, the extent of the reduction remains controversial, especially after Friday’s mixed labor report on the direction the central bank is headed.
“We need to see clear evidence of a slowdown/slowdown, particularly in the labor market, for more action from the Fed, but I think we had a clearer picture in the last jobs report,” ING’s Carnell said in a .
According to the CME FedWatch tool, the market believes the probability of the Fed cutting interest rates by 25 basis points is 66%, and when the Fed announces its decision on September 18, the probability of a rate cut was 50 basis points.
The dollar remained on the defensive, while the yen rose 0.6% to $141.51 against the dollar, its highest since January, boosted by comments from Bank of Japan board member Junko Nakagawa.
In his speech, Nakagawa reiterated that if the economy and inflation meet his forecasts, the central bank will continue to raise interest rates.
In commodities, oil prices stabilised on Wednesday after falling more than 3% in the previous session, remaining close to their lowest level in three years even after OPEC+ cut demand forecasts for this year and 2025.
Brent crude futures were up 0.68% at $69.65 a barrel. US West Texas Intermediate (WTI) crude oil rose 0.75% to $66.25 a barrel.
