Asia stock markets weaken ahead of US inflation data

Investors looking for clues about the Federal Reserve's expected next steps on interest rates sent Asian stock markets lower on Monday ahead of U.S. inflation September data this week.

When U.S. equities closed with modest gains the previous day, MSCI's broadest index of Asia-Pacific shares outside of Japan was down 0.4%.

Losses of 0.25 percent were recorded by both Australian shares and the Nikkei 225 index in Japan.

The Hang Seng Index in Hong Kong fell 1.4% due to losses in property companies and the 3.1% drop in the value of e-commerce behemoth Alibaba Group following the unexpected resignation of outgoing CEO Daniel Zhang from the company's cloud division. The CSI300 Index of China's most valuable stocks rose by 0.37 percent.

On Wednesday, the US Department of Labor will release the August Consumer Price Index (CPI). Inflation is predicted to increase by 0.6% month-over-month in August, which would bring the yearly rate to 3.6%, according to a report by Wells Fargo.

According to CME group's FedWatch Tool, investors are pricing in a 93% probability that the Fed will retain rates at current levels when its next meeting ends on September 20 but only 53.5% for another pause at the November meeting.

Economists from ANZ stated on Monday that "hawkish FOMC speakers have indicated that it may be appropriate to hold in September" and that "we think the committee wants time to digest incoming data."

Because of the government's tight monetary policy, we anticipate that economic growth will slow down from here on out.

Yields on 10-year Treasury notes increased to 4.2939% from a U.S. low of 4.256% on Friday. The yield on the benchmark 2-year Treasury note reached 5.0033%, up from the U.S. market's closing yield of 4.984%.

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In China, deflationary pressures eased in August as the consumer price index (CPI) increased by 0.1% from August 2017. That was worse than the consensus projection of 0.2% growth in a Reuters poll, but significantly better than the 0.3% drop seen in July.

There was also the slowest decline in Chinese factory prices in five months. After a 4.4% drop in July, the producer price index fell 3.0% from a year earlier, which was in line with predictions.

Following strikes at important Australian liquefied natural gas (LNG) plants, which supply 5% of the world's output, the global energy market is keeping a close eye on the negotiations between Chevron Corp and its employees.

Since the first reports of possible labor unrest surfaced in August, gas prices in Europe have been highly unpredictable.

After five days of talks yielded no agreement on Friday, news of the impending strikes caused gas prices to soar by as much as 14 percent.

On Monday, the value of the dollar dipped by 0.41 percent versus the yen, to 147.21. This year's peak was set on September 9 at 147.87 and it is rapidly approaching that point.

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The dollar index, which measures the greenback's value against a basket of currencies of other key trading partners, fell by 0.057% to 104.79, while the European single currency rose by 0.1% to $1.0709 on the day, having lost 1.22% during the previous month.

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Prices for a barrel of crude oil in the United States fell by 0.59 percent, to $86.99. The price of a barrel of Brent crude oil dropped by $0.44, bringing it to $90.21.

Gold on the spot market rose little, selling for $1,918.3663 per ounce.