Morning Bid: Inflation relief gives bonds little reprieve

Inflation Relief Offers Little Reprieve as Global Bond Yields Stay High

Market Overview and Key Developments

A look at the day ahead in European and global markets from Rae Wee

Asian Markets and Bond Yields

Asian markets ushered in the final quarter of the year on a muted note on Thursday, though bond markets remained firmly in focus for investors as yields hovered at multi-year highs.

US Inflation and Federal Reserve Policy

A slower-than-expected rise in US inflation in August, alongside a downward revision to July's reading, reduced some bets on a Federal Reserve rate hike this month.

But that did little to help US Treasury yields, which scaled fresh peaks overnight and held near those levels in Asia trade. [US/]

Geopolitical Tensions and Euro Zone Inflation

Stalling peace talks between the US and Iran to end the seven-month-long war in the Middle East have done little to help the global inflation picture, with the euro zone feeling the pain as prices climbed far quicker than expected in some of the bloc's biggest economies last month.

Stock Markets and Corporate Earnings

In stock markets, blockbuster earnings from AI chipmaker Micron Technology failed to lift the frayed mood in Asia, though trading was thinned with markets in Hong Kong and China closed for a holiday.

Micron Technology's Performance

Micron forecast quarterly revenue above estimates and said customers had increased commitments under its long-term supply agreements to $32 billion, signalling unabated demand for AI memory chips.

Central Bank Actions and Economic Sentiment

Bank of Japan Survey and Rate Policy

Elsewhere, a quarterly Bank of Japan (BOJ) Tankan survey showed Japanese business confidence hit an eight-year high over July-September amid elevated inflation expectations, bolstering the case for interest rate hikes.

BOJ September Meeting Insights

Meanwhile, a summary of opinions from the BOJ's September meeting, at which policymakers raised borrowing costs to a 31-year high, showed some of them saw the need to accelerate the pace of tightening or move rates closer to the central bank's desired level sooner.

Key Economic Events to Watch

Key developments that could influence markets on Thursday:

• UK nationwide house price (September)
• France and Germany S&P manufacturing PMI (September)
• Euro zone unemployment rate (August)

(Editing by Jacqueline Wong)