Globally Easing Inflation Sparks Asian Stock Rally as China Growth Slows 📈

A surprise drop in U.S. inflation has sparked a rally across volatile Asian stock markets, easing global interest rate hike fears, even as China’s economic growth slowed to 4.3% in Q2 due to weak domestic demand. • Market Movements: South Korea’s KOSPI index surged 7% ahead of key semiconductor earnings, Japan’s Nikkei rose 1%, and MSCI’s broadest Asia-Pacific index gained 2.4%. • U.S. Inflation Drop: June headline CPI fell 0.4%—its first drop since the pandemic. Annualised core inflation came in at 2.6% (below the expected 2.8%), slashing expectations of a July U.S. rate hike to just 16%. • China Growth Miss: China’s annual growth slowed to 4.3% in Q2, missing analyst expectations due to weak domestic demand and Middle East oil shocks, though June retail sales rebounded. • Oil & Currency Markets: Brent crude steadied at US$ 85.80/barrel after a 13% weekly surge, as geopolitical tensions remained high despite the U.S. scrapping proposed shipping fees through the Strait of Hormuz. The U.S. Dollar weakened, while the Chinese Yuan rose to a one-month high of 6.7635.