Morning Bid: Fed bets cool, BOJ wagers heat up

A look at the ‌day ahead in ​European ​and global markets from Satoshi Sugiyama

For all the anticipation, Wednesday's U.S. CPI data was largely in line with expectations, perhaps ‌even a little anticlimactic.

Coupled with softer-than-expected July nonfarm payrolls, it ⁠has dampened money-market bets on a September Federal Reserve rate hike.

In contrast, Thursday's Japanese wholesale ‌inflation data reinforced expectations for ‌a September rate hike by the Bank of Japan.

The 7.2% year-on-year rise in July suggested that price pressures remain alive and resilient, driven ​in part by strong demand induced by the AI boom and higher raw-material costs from the Middle East war.

Asian stocks were mostly ⁠firm in the morning session, with South Korean shares hitting their highest levels in three weeks on ​chip stocks.

MSCI's broadest index of Asia-Pacific shares outside Japan was up nearly 1%, while Japan's Nikkei rose 1.61% as ​of the midday recess.

In early European trades, ‌the pan-region Euro Stoxx 50 futures rose 0.35%, German DAX futures were up 0.26% and FTSE futures edged 0.27% ⁠higher.

Oil prices fell after forecasters scaled back this year's global demand outlook, citing the broader fallout from the Middle East war.

United States and Iran remained deadlocked ⁠over efforts to end the conflict, with conflicting claims about control over the vital ​Strait of Hormuz.

U.S. crude shed 1.3% to $82.19 a barrel and Brent eased to $87.95 per barrel, down 1.16%.

In Sydney, Reserve Bank of Australia Assistant Governor Christopher Kent warned of ‌the risk of further policy tightening at a Reuters NEXT Newsmaker event, saying inflation threats remain on the upside ‌and "a lot of things" would need to go right to avert another ⁠rate hike.

Key developments that could ‌influence markets on Thursday:

- ​UK April-June quarter, June GDP - Euro zone, UK June industrial production- U.S. weekly jobless claims

(Reporting by Satoshi Sugiyama; Editing by ‌Jamie Freed)

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