[MARKET ANALYSIS] Asia-Pac stocks trade higher but with upside capped after weak handover from US and as NFP looms, while participants also digest earnings and mixed Chinese inflation in holiday-thinned conditions

APAC Stocks: Positive

• Asia-Pac stocks trade higher but with some of the gains in the region capped after the weak US lead and with the NFP report on the horizon, while participants also digest earnings and data in thinned conditions with Japanese markets shut for a holiday.

ASX 200: +1.5%

• Outperforms with the index led higher by the top-weighted financial sector after shares in Australia's largest lender and company by market cap, CBA, rallied following a 5% increase in H1 profits.

Hang Seng & Shanghai Comp: Hang Seng +0.3% / Shanghai Comp +0.3%

• Chinese markets are kept afloat following the PBoC liquidity operations and recent pledge to continue implementing an appropriately loose monetary policy in its quarterly implementation report. However, the upside is limited as participants also digest mixed Chinese inflation data in which CPI printed softer-than-expected (0.2% vs Exp. 0.4%), while PPI was slightly better-than-feared but remained in deep deflationary territory.

US Equity Futures: Higher

• US index futures mildly rebounded overnight amid the brightened mood in Asia and with some repositioning ahead of the looming jobs report.

European Equity Futures Flat

• Indicate a quiet cash market open with Euro Stoxx 50 futures flat after the cash market finished with losses of 0.2% on Tuesday.

Asia-Pacific stocks are trading higher, but gains are limited due to a weak lead from U.S. markets and upcoming Non-Farm Payroll (NFP) data. Mixed inflation figures from China, along with thinned holiday conditions, suggest that while the markets may be buoyed by earnings and liquidity measures, caution prevails ahead of significant economic data.