Asian Markets Slide as Investors Await Crucial US Inflation Report

Asian Markets Drop Ahead of US Inflation Data

Asian stock markets registered sharp declines following a fourth consecutive negative session on Wall Street. Tokyo's Nikkei index dropped 2.2%, South Korea's Kospi fell 2.4%, the Shanghai Stock Exchange retreated by 1.8%, and Hong Kong's Hang Seng index weakened by 0.8%. Investors are now holding their breath for the upcoming US Consumer Price Index report.

Anticipation Surrounds US Inflation Report

The US inflation report for August is set to be published today at 15:30 Israel time. The average analyst consensus expects a monthly index reading of 0.4%, compared to 0.1% in July, and an unchanged annual inflation rate of 3.4%. The core index, excluding food and energy, is projected to stand at 0.2% monthly and 2.4% annually.

The inflation data carries immense significance regarding the Federal Reserve's upcoming interest rate decision, which will be determined during a meeting scheduled for Tuesday and Wednesday.

Following the Producer Price Index release showing a 0.4% increase in line with forecasts, the probability of a 0.25% rate hike rose to over 73%, according to the CME Group's FedWatch tool for futures contracts.

Oil Prices Rise and Trump Rejects Saudi Request

Meanwhile, oil prices registered slight increases after surging in recent days due to Houthi advances in western Yemen. Brent crude rose by 0.3% approaching $108 a barrel, while WTI stood at $102.5 a barrel.

Overnight, Axios reported that US President Donald Trump rejected a request from Saudi Crown Prince Mohammed bin Salman to launch strikes against the Houthis during two telephone conversations held on Thursday. According to US official sources, the Trump administration is not inclined to take direct military action against the terror organization at this time.