Asian markets struggled Tuesday to extend a Wall Street and European rally as traders nervously await US inflation data, while lingering concerns about China's economy remain a millstone.
The consumer price index report is one of the key indicators that help guide the Federal Reserve's policy decision-making. Next week's meeting is expected to see officials hold interest rates and its statement will be pored over for its thinking for the future.
Equities have endured a largely rough September on concerns that recent figures pointing to a resilient economy and jobs market will pressure the bank to tighten once more this year as it looks to defeat inflation.
That has been compounded by mixed signals from Fed officials, with some pushing for another hike and others saying it would be best for the economy to wait and see the effects of more than a year of lifting.
With boss Jerome Powell insisting that choices would be based on incoming data, investors have taken weak economic readings as being good news for the rates outlook.
"This week is more likely to be a 'good news is good, bad news is bad' story," said Chris Larkin, managing director of trading and investing at E*Trade from Morgan Stanley.
"The market's ability to rebound in the near term could hinge on this week's inflation numbers, especially Wednesday's CPI."
A group of leading economists at some of the world's biggest banks said they did not expect the Fed would hike again and would begin slashing borrowing costs in the new year, while they also predicted the United States would avoid a recession.
"Given both demonstrated and anticipated progress on inflation, the majority of the committee members believe the Fed's tightening cycle has run its course," said Simona Mocuta, chair of the 14-member American Bankers Association's Economic Advisory Committee.
The ABA includes economists from banking titans including JPMorgan Chase, Morgan Stanley and Wells Fargo, and its reports are often read by Powell and other decision-makers at the Fed.
All three main indexes on Wall Street enjoyed healthy gains thanks to a surge in tech firms, but Asia again stuttered.
Tokyo, Sydney, Taipei, Mumbai and Bangkok rose but Hong Kong, Shanghai, Seoul, Singapore, Wellington and Jakarta were all down.
London and Paris rose at the open, while Frankfurt was flat.
Property stocks in Hong Kong rallied following a report that troubled developer Country Garden had been given the green light by creditors to extend payments on six yuan bonds by three years.
The firm won approval from creditors this month to extend a deadline for another key bond repayment to give it time to recover financially.
The latest report helped soothe concerns about the troubled property sector, pushing the firm's shares up around two percent, having been in the red earlier in the day. Rival China Evergrande, which is also struggling with massive debts, climbed more than six per cent.
Country Garden said last week it had made multi-million-dollar interest payments on two outstanding loans, narrowly avoiding what would have been its first default.
However, China worries continue to dampen buying sentiment, even after small signs of improvement in the world's number two economy, including a return to inflation and smaller-than-expected drop in exports and imports.
And while the government has announced a series of measures to kickstart growth and support the property sector, it is facing calls to unveil a blockbuster stimulus along the lines of that seen in 2008 during the global financial crisis.
On currency markets, the yen weakened slightly against the dollar, having enjoyed a much-needed bounce on comments from the Bank of Japan's head suggesting it could begin moving away from its ultra-loose monetary policy.
