AFP

Stock markets mostly retreated and the dollar dropped Tuesday on the eve of key US inflation data.

Investors are on edge ahead of Wednesday’s figures, with some observers warning that an above-estimate reading on inflation, which is already at a four-decade high, could spur another sharp market sell-off.

There is a growing expectation also that central bank interest rate hikes aimed at curbing soaring prices will go too far and tip the global economy into recession.

Swissquote Bank analyst Ipek Ozkardeskaya said the recent drop in energy and commodity prices “should have a cooling effect on inflation, yet, higher labour costs could keep inflation sticky at undesirably high levels”.

Oil prices rose but remain around six-month lows as recession fears mount and traders fret over the impact on demand. 

They are keeping tabs also on Iran nuclear talks after the European Union submitted a “final text” at negotiations to salvage a 2015 deal.

An agreement could open the way for Tehran to resume sales of crude on international markets, partly helping to plug a hole left by the ban on Russian exports following the invasion of Ukraine. 

Edward Moya, analyst at OANDA trading group, said “it seems unlikely a breakthrough will happen anytime soon. 

“Tehran seems like they are willing to negotiate, but an imminent decision to agree to the EU’s proposal seems unlikely”, he added.

European and Asian stock markets mainly retreated after Wall Street provided a glum lead overnight.

Tech firms took a hit following a disappointing earnings report from chip giant Nvidia, seen as a warning that the end of the downturn was still some way off.

“While it’s tempting to buy into the narrative that we’ve seen the lows of the year, none of the price action thus far serves to support that conclusion,” said CMC Markets analyst Michael Hewson.

“Nvidia’s profit warning merely serves to underline the challenges facing, not only the tech sector, but the wider global economy.”

Hong Kong reversed a morning rally after its government denied claims it was considering removing an extra stamp duty for mainland Chinese buying property in the city.

– Key figures at around 1100 GMT –

London – FTSE 100: FLAT at 7,480.32 points

Frankfurt – DAX: DOWN 0.9 percent at 13,565.22

Paris – CAC 40: DOWN 0.4 percent at 6,499.55

EURO STOXX 50: DOWN 0.7 percent at 3,729.89

Tokyo – Nikkei 225: DOWN 0.9 percent at 27,999.96 (close)

Hong Kong – Hang Seng Index: DOWN 0.2 percent at 20,003.44 (close)

Shanghai – Composite: UP 0.3 percent at 3,247.43 (close)

New York – Dow: UP 0.1 percent at 32,832.54 (close)

Euro/dollar: UP at $1.0227 from $1.0194 Monday

Pound/dollar: UP at $1.2101 from $1.2079

Euro/pound: UP at 84.51 pence from 84.35 pence

Dollar/yen: DOWN at 134.91 yen from 134.98 yen

Brent North Sea crude: UP 1.0 percent at $97.65 per barrel

West Texas Intermediate: UP 1.0 percent at $91.68 per barrel

Most markets rose Tuesday but investors moved cautiously ahead of US inflation data later in the week, after a jobs report suggested the Federal Reserve would likely need to continue its sharp interest rate hikes to tame runaway prices.

A rally across global markets from June lows appeared to have hit the buffers after Friday’s forecast-busting employment reading showed the world’s top economy remained resilient but meant more monetary tightening was on the cards.

There had been a hope that recent weak data — including one showing the economy contracted for two straight quarters — would allow the bank to take its foot off the pedal in lifting borrowing costs, and possibly begin cutting in 2023.

Now, investors are on edge ahead of Wednesday’s figures, with some observers warning that an above-estimate reading on inflation, which is already at a four-decade high, could spur another sharp market sell-off.

There is a growing expectation that central bank interest rate hikes will go too far and tip the global economy into recession.

Saira Malik, at investment manager Nuveen, told Bloomberg Television the losses could kick in when investors realise “the Fed is not going to pivot on interest-rate hikes in early 2023, inflation should remain pretty persistent and rate hikes should continue”.

Wall Street provided a glum lead as tech firms took a hit following a disappointing earnings report from chip giant Nvidia caused by lower-than-expected gaming income, which was seen as a warning that the end of the downturn was still some way off.

“While it’s tempting to buy into the narrative that we’ve seen the lows of the year, none of the price action thus far serves to support that conclusion,” said CMC Markets analyst Michael Hewson.

“Nvidia’s profit warning merely serves to underline the challenges facing, not only the tech sector, but the wider global economy.”

Asian equities fluctuated in the morning but improved as the day progressed.

Shanghai, Sydney, Seoul, Wellington, Taipei, Bangkok, Jakarta and Manila were in positive territory but Tokyo fell.

Hong Kong reversed a morning rally led by developers after the government denied claims it was considering removing an extra stamp duty for mainland Chinese buying property in the city.

London was slightly higher in the morning, though Paris and Frankfurt edged down.

Oil prices fell and remain around six-month lows as recession fears mount and traders fret over the impact on demand. They are also keeping tabs on Iran nuclear talks after the European Union submitted a “final text” at negotiations to salvage a 2015 deal.

An agreement could open the way for Tehran to resume sales of crude on international markets, partly helping to plug a hole left by the ban on Russian exports following the invasion of Ukraine. 

However, OANDA’s Edward Moya said that “it seems unlikely a breakthrough will happen anytime soon. Tehran seems like they are willing to negotiate, but an imminent decision to agree to the EU’s proposal seems unlikely”.

– Key figures at around 0810 GMT –

Tokyo – Nikkei 225: DOWN 0.9 percent at 27,999.96 (close)

Hong Kong – Hang Seng Index: DOWN 0.2 percent at 20,003.44 (close)

Shanghai – Composite: UP 0.3 percent at 3,247.43 (close)

London – FTSE 100: UP 0.1 percent at 7,486.01

Euro/dollar: UP at $1.0209 from $1.0194 Monday

Pound/dollar: UP at $1.2083 from $1.2079

Euro/pound: UP at 84.49 pence from 84.35 pence

Dollar/yen: DOWN at 134.94 yen from 134.98 yen

West Texas Intermediate: DOWN 0.8 percent at $90.01 per barrel

Brent North Sea crude: DOWN 0.8 percent at $95.93 per barrel

New York – Dow: UP 0.1 percent at 32,832.54 (close)

A pedestrian crossing turned viral catwalk has become a site for Jakarta’s young fashionistas to express themselves, while attracting the disapproval of police in the traffic-clogged Indonesian capital.

The informal downtown gathering has drawn sartorial adventurists from across the suburbs of the metropolis, including from Citayam, leading it to be dubbed “Citayam Fashion Week”.

And with their poses and struts all being shared on TikTok and Instagram, some Citayam pioneers have found instant fame, earning modelling jobs, endorsements and an army of adoring fans.

“I feel like this is the place where I can express my style and create content. It is so much fun because there are so many people and I can meet new friends here. I don’t even want to go home,” 18-year-old student Ricat Al Fendri told AFP.

He and some friends had taken a morning train to the central meeting spot, tucked between sleek skyscrapers and trendy cafes, to flaunt their outfits for the day.

Police, who previously moved to ban the use of the crosswalk as a runway, now regularly shout through a loudspeaker to ward the crowd off the street.

But that does not deter girls who don wide-legged jeans and colourful sunglasses — and boys in leather jackets, stylish sneakers and faux-fur coats — from filming their struts for social media.

Some of the more enthusiastic teenagers have been caught sleeping on the area’s sidewalks at night after missing the last train home.

“We have the right to hang out here. It’s a public space and for me, it’s a great stress reliever from school exams,” said Al Fendri. 

– Copycat crowds –

The outfits on display have begun to draw crowds, with news of the phenomenon spreading by word of mouth in the megacity of 30 million people.

Saera Wulan Sari, a 15-year-old school dropout from North Jakarta who makes a living selling clams, comes to watch the crowds with her friends.

“I am always amazed by other people’s outfits, they are so much cooler than me and their clothes are very stylish,” Sari said. 

The gathering has been likened to a smaller version of Tokyo’s famed Harajuku fashion district.

The movement has become so popular that copycat gatherings have spread elsewhere in Java –- Indonesia’s most populous island -– in cities such as Semarang and Bandung.

And its viral fame has attracted attention from celebrities and influencers, as well as public officials including President Joko Widodo, who said young people should be able to express themselves creatively.

– ‘It’s beautiful’ –

Local brands are now starting to take note and capitalise on the momentum by advertising their products and endorsing the “stars” of the movement, providing free clothes, shoes, and publicity. 

“Teenagers are searching for their identity and they need recognition and validation. These teens saw that the quick and easy way to earn them is through likes and shares,” Devie Rahmawati, a social affairs expert from the University of Indonesia told AFP. 

“Marginalised teenagers used to resort to violence or illegal racing, now they choose fashion instead. This is a positive thing and I think it’s beautiful.”

For many, the booming street fashion scene has also become an affordable arena for fashionable experimentation, set against the backdrop of the city’s most affluent district. 

Teenagers from poor households who cannot afford designer outfits can join the gathering without judgement, Khairul Badmi, a 22-year-old aspiring actor, told AFP. 

“To be a part of Citayam Fashion Week, you don’t have to wear certain outfits or brands that empty your wallet,” he said.