• Asian equities remain lacklustre as traders struggle with contrasting clues ahead of US inflation data.
  • US stimulus, debt ceiling jitters and Delta covid variant woes confuse market players amid a light-calendar day.

Shares in Asia-Pacific fail to portray any clear direction for the market sentiment during early Wednesday. The reason could be linked to the cautious mood ahead of the US Consumer Price Index (CPI). However, contrasting plays between the bullish and the bearish catalyst are more to blame for the dull day.

That said, the US Senate’s passage of a $1.2 trillion infrastructure spending plan back the buyers but China’s seven-month high infections and the UK’s five-month top virus death toll tame the optimism. Also negative for the mood could be the headlines suggesting the US Republicans’ readiness to conquer Democratics over the debt limit’s upward revision, which in turn poses for further policy deadlock. Additionally, Fed tapering concerns and mixed performance of commodities are extra filters to the market moves.

Amid these plays, MSCI’s index of Asia–Pacific shares outside Japan drop 0.45% whereas Japan’s Nikkei 225 rises 0.55% by press the time of the pre-European session on Wednesday.

Australia’s ASX 200 prints mild gains even as Melbourne extends the virus-led lockdowns for another seven days whereas New Zealand’s NZX 50 bears the burden of a change in the RBNZ regime. Further, Chinese equities grind lower while markets in Indonesia remain lackluster.

Moving on, South Korea and India also track Chinese losses amid COVID pessimism at home.

On a broader front, S&P 500 Futures print mild losses even as Wall Street benchmarks remained firmer. Further, the US Dollar Index (DXY) benefits from the firmer US Treasury yields, which in turn tests the early Asian consolidation of commodities.

Given the lack of major data/events, investors will keep their eyes on the US CPI for July for fresh impulse.

Read: US July CPI Preview: Inflation data unlikely to change Fed tapering expectations

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