Asia-Pacific stocks set to rise ahead of key U.S. inflation data

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Women dress in graduation gowns at the West Kowloon Cultural District in front of the Hong Kong Skyline in Hong Kong (Photo by Vernon Yuen/NurPhoto via Getty Images)

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Asia-Pacific markets are set to rise as investors look ahead to key U.S. consumer inflation data, which will inform the Federal Reserve's rate decision in its policy meeting beginning Oct. 31.

In Australia, the S&P/ASX 200 added 0.18%.

In Japan, the Nikkei 225 looks set to rise, with the futures contract in Chicago at 32,100, and its counterpart in Osaka at 32,020 against its last close at 31,936.51.

Hong Kong's Hang Seng index look set to climb with futures at 18,137 compared with the HSI's close of 17,893.1.

Overnight in the U.S., all three major indexes closed in the green. The Dow Jones Industrial Average climbed 0.19%, or 65.57 points, to close at 33,804.87. The S&P 500 gained 0.43%, ending at 4,376.95. The Nasdaq Composite added 0.71% to close at 13,659.68.

Economists surveyed by Dow Jones are forecasting a 0.3% month-over-month increase for the upcoming U.S. inflation data, and a 3.6% rise from the prior year.

— CNBC's Pia Singh, Samantha Subin and Hakyung Kim added to this report.

Fed officials will maintain ‘restrictive’ policy until inflation eases, Sept. minutes show

Federal Reserve officials at their September meeting differed on the need for more policy tightening, but indicated rates would need to stay elevated until the policymakers are convinced inflation is heading back to 2%.

One more hike would be likely, minutes released Wednesday showed.

"A majority of participants judged that one more increase in the target federal funds rate at a future meeting would likely be appropriate, while some judged it likely that no further increases would be warranted," the summary of the Fed's Sept. 19-20 policy meeting stated.

Watch energy amid period of geopolitical risk, says Citi

With the Israel-Hamas raising concerns about oil supplies, Citi says energy prices will likely be the main driver of the conflict's impact on equity markets.

"Historically, equity markets are usually higher 12m after the start of geopolitical conflicts despite initial volatility. However, equities have seen significant downside when geopolitical risks catalyze energy crises," global equity strategist David Groman said in a Tuesday note.

To be sure, Groman added that a meaningiful "geoeconomic risk" had been applied to global equity markets even prior to the outbreak of the war.

— Hakyung Kim

Weak demand at 10-year Treasury auction sends yields higher

Demand was lackluster for $35 billion of 10-year Treasurys at the 1 p.m. ET Wednesday auction, with Treasury dealers buying 18.7% of the total supply vs a more usual 15.6% average, according to Ben Jeffery, VP for U.S. rates strategy at BMO Capital Markets. The auction resulted in a 10-year yield of 4.61%, up from 4.289% at the September auction.

Afterward, 10-year open market yields rose as high as 4.6180% against an early morning low of 4.544%.

The auction saw weak demand, with "the tail" at 1.7 basis points (0.017%), Jeffery wrote. "The tail' measures the high yield bid minus the note's when-issued yield. A positive tail denotes weak demand and a negative tail strong demand.

Non-dealer bidding constituted 81.3% of the total vs a usual 84.4% average, Jeffery wrote, adding that "[s]ince the result, rates have ticked higher in the follow through."

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