Asian stocks poised for weekly gain as US rate hike bets fade

A single tenth of a percentage point in a monthly inflation reading just moved billions of dollars across Asian equity markets. July’s US Consumer Price Index came in at 0.1% month-on-month, exactly matching analyst forecasts, and that was enough to spark a broad rally from Tokyo to Seoul. The year-on-year inflation rate dipped to 3.4% from June’s 3.5%. Not a dramatic swing by any measure, but in a market obsessively parsing every data point for clues about the Federal Reserve’s next move, even a small downward tick in inflation carries outsized weight. The rally in numbers The MSCI Asia-Pacific ex-Japan index climbed 0.97% on August 13, a respectable move for an index covering some of the world’s largest economies. But the real fireworks were in Seoul. South Korea’s KOSPI surged 4.4%, a single-day jump that would be noteworthy even during earnings season. Japan’s Nikkei 225 added 1.86%, rounding out a strong day for the region’s two largest developed markets. What’s driving the enthusiasm isn’t just the inflation print itself. It’s what the number implies about future Fed policy. The CME FedWatch tool, which tracks market-implied probabilities for rate decisions, showed the likeli...