The US dollar continues to trade softer, with the US Dollar Index inching lower. China CPI data gives direction to Asian markets. AUD and HK indices in focus.
AUD, Hong Kong stocks climb as China Core CPI strengthens
In today’s Asia session, the US dollar has continued to trade in a softer tone. The US Dollar Index inched lower by -0.05% after it briefly tested the 97.30 key long-term support on Tuesday, September 9.
A clearer picture of a deteriorating US labour market has emerged; the preliminary annual revision to non-farm payrolls in the 12 months through March 2025 has been revised down by a record of 911,000, more than 818,000 forecasted.
The revision showed that average monthly job growth was roughly half the previously reported average of 149,000 per month, indicating the labour market slowdown in recent months in the US.
Overall, putting pressure on the Fed to restart its interest rate cut cycle at its next FOMC meeting on Wednesday, 17 September, as weakness in jobs growth outweighs the risk of sticky inflation.
The AUD is the star performer among the major currencies today as it rallied by 0.3% against the US dollar on the backdrop of an imminent dovish Fed and the easing concerns over a potential deflationary spiral in China from the latest key inflationary trends data for August.
China’s core CPI (excluding food and energy) has improved to a further positive reading of 0.9% y/y in August from 0.8% y/y in July, and has trended higher in the past six months since the February 2025 print of -0.1% y/y.
Hong Kong’s Hang Seng Index has also reacted positively to China's upbeat core CPI data, as it staged an intraday rally of 1.1% at the time of writing and broke above a four-week range resistance at 25,860.
Japan’s Nikkei 225 resumed its bullish momentum after yesterday’s pull-back of -0.4% and recorded a gain of 0.9% to tick back towards Tuesday’s all-time high of 44,186.
The S&P 500 and Nasdaq 100 E-mini futures continued to gain in today’s Asia session, with intraday gains of 0.3% each. The S&P 500 rallied by 0.3% on Tuesday to hit another record all-time closing high of 6,513.
