SYDNEY, June 6 Asian shares steadied on Monday as US stock futures made cautious gains ahead of US inflation data later in the week, while the euro touched a seven-year top on the yen amid wagers of European Central Bank tightening.
Oil prices firmed after Saudi Arabia raised prices sharply for its crude sales in July, an indicator of how tight supply is even after OPEC+ agreed to accelerate its output increases over the next two months.
MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.1%, while Japan's Nikkei recouped early losses to gain 0.3%.
S&P 500 futures added 0.4% and Nasdaq futures 0.6%. EUROSTOXX 50 futures rose 0.6% and FTSE futures 0.9%.
Chinese blue chips climbed 1.2% after a survey confirmed service sector activity contracted in May, but the Caixin index did improve to 41.4 from 36.2.
Markets will be on tenterhooks for the US consumer price report on Friday, especially after EU inflation shocked many with a record high last week.
Forecasts are for a steep rise of 0.7% in May, though the annual pace is seen holding at 8.3% while core inflation is seen slowing a little to 5.9%.
A high number would only add to expectations of aggressive tightening by the Federal Reserve with markets already priced for half-point hikes in June and July and almost 200 basis points by the end of the year.
Some analysts thought Friday's upbeat payrolls report suggested the Fed was on track for a soft landing.
Not so negative
The European Central Bank meets on Thursday and President Christine Lagarde is considered certain to confirm an end to bond buying this month and a first rate hike in July, though the jury is out on whether that will be 25 or 50 basis points.
Money markets are priced for 125 bps of hikes by year-end, and 100 bps as soon as October.
"Recent communication by ECB officials have looked to 25bp increases at July and September to exit negative rates by the end of Q3, though with some members preferring to leave the door to larger 50bp hikes open," said analyst at NAB. "Lagarde's post-meeting press conference will be closely watched."
The prospect of rates turning positive this year has helped the euro steady at $1.0722, some way from its recent trough of $1.0348, though it has struggled to clear resistance around $1.0786.
The euro also made a seven-year peak on the yen at 140.35 , after climbing 2.9% last week, while the dollar held at 130.60 yen having also gained 2.9% last week.
Against a basket of currencies, the dollar stood at 102.110 after firming 0.4% last week.
In commodity markets, wheat futures jumped 4% after Russia struck Ukraine's capital Kyiv with missiles, dampening hopes for progress in peace talks.
Gold was stuck at $1,854 an ounce having held to a tight range for the past couple of weeks.
Oil prices got an added lift after Saudi Arabia set higher prices for shipments to Asia, while investors are wagering supply increases planned by OPEC will not be enough to meet demand especially as China is easing its lockdowns.