Fed Hike Bets Cooled Down by US CPI Data

The Federal Reserve's rate hike bets were cooled down by US CPI data that was largely in line with expectations on Wednesday. The softer-than-expected July nonfarm payrolls also contributed to this sentiment.

This is a contrast to the Bank of Japan, which has reinforced its expectation for a September rate hike. Japanese wholesale inflation data showed a 7.2% year-on-year rise in July, driven by strong demand and higher raw-material costs from the Middle East war.

The Asian markets were mostly firm on Thursday, with South Korean shares hitting their highest levels in three weeks due to chip stocks. Japan's Nikkei rose 1.61%, while MSCI's Asia-Pacific index outside of Japan was up nearly 1%.

In early European trades, the Euro Stoxx 50 futures were up 0.35%. The oil prices fell after forecasters scaled back this year's global demand outlook due to the Middle East war. US crude shed 1.3% to $82.19 a barrel, and Brent eased to $87.95 per barrel.

RBA Assistant Governor Christopher Kent warned of further policy tightening in Australia, citing inflation threats on the upside. He said 'a lot of things' would need to go right to avert another rate hike.