SINGAPORE — Shares in Asia-Pacific slipped in Tuesday morning trade, as investors continue monitoring developments surrounding the Covid situation in mainland China.
U.S. inflation data is also expected to be out later Tuesday stateside and could provide more clues on the outlook for Federal Reserve policy.
Australian stocks also declined, with the S&P/ASX 200 trading fractionally lower.
MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.09% lower.
The World Health Organization said Monday it is monitoring the Covid situation in mainland China, where officials have been battling a major surge in cases. The major Chinese city of Shanghai has accounted for most of mainland China’s new Covid cases and was in lockdown about a week after a two-part shutdown was originally supposed to end.
Overnight stateside, the Dow Jones Industrial Average shed 413.04 points to 34,308.08 while the S&P 500 slipped 1.69% to 4,412.53. The tech-heavy Nasdaq Composite lagged, dropping 2.18% to 13,411.96.
The U.S. consumer price index for March is set to be released during ET time Tuesday, with the White House warning that it expects the report to show inflation that is “extraordinarily elevated.” Economists polled by Dow Jones expect the data to show an 8.4% annual increase in prices, the highest since December 1981.
“Very high US inflation will keep alive market expectations for aggressive FOMC tightening in our view,” said Carol Kong, senior associate for currency strategy and international economics at Commonwealth Bank of Australia.
“We expect the FOMC will respond to strong underlying inflation by increasing the Funds rate by 50bp in May and in June,” Kong said.
Dollar index tops 100 level
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 100.037 — once again crossing the 100 level.