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A stock rally cooled in Asia yesterday and the dollar rose as investors absorbed disappointing data prints and a surprise interest-rate cut from China, whose economic woes are hampering the global outlook.

An Asian share index added less than 0,5 percent, propped up by Japan, where the Nikkei 225 is set to erase its 2022 losses.

Equity futures were mixed: S&P 500 and Nasdaq 100 contracts dipped but Europe’s edged up.

Data showed China’s July retail sales, investment and industrial output missed economists’ estimates. The central bank had earlier cut borrowing costs. China’s bond yields and the offshore yuan fell, while its bourses wavered.

Elsewhere, Treasury yields were little changed and the bond curve remained deeply inverted, pointing to worries that the Federal Reserve’s campaign of monetary tightening against high inflation will spark a US recession.

Equity markets in recent weeks have drawn succor from signs of slowing price pressures, which stirred hopes of a shift by the Fed to less aggressive rate hikes.  

China’s faltering economy shows many hurdles still lie ahead for a near-13 percent rebound in global stocks from June bear-market lows. — Bloomberg