Stocks fall as investors’ anxieties appear ahead of US inflation data. Asia stocks were struggling to climb, and the dollar was steady on Wednesday ahead of U.S. consumer price data that might hurt chances for interest rate reduction later this year if inflation fails to drop.

MSCI’s broadest Asia-Pacific share index outside Japan (.MIAPJ0000PUS) fell on Tuesday and 0.3% early on Wednesday. Nikkei lost 0.4%.

S&P 500 futures were stable in Asia after the S&P 500 (.SPX) lost 0.5% overnight. A strong dollar dropped the euro to $1.0971.

At 1230 GMT, analysts estimate headline CPI to remain at 5% and core CPI to decrease slightly to 5.5%, although anything stickier might derail interest rate bets.

“That’s the thing that’d get taken out if CPI numbers come in on the higher side,” said ING economist Rob Carnell.

“It doesn’t look particularly sensible if inflation is falling at too slow a rate and that could feed through into higher longer-term treasury yields as well.”

Treasuries were firm overnight, but debt-ceiling brinkmanship distorts the bills market as investors shun early June maturities.

NatWest markets analysts reported a 2.93 bid-to-cover ratio at a three-year auction, the highest since 2018.

Benchmark Asia’s 10-year rates were 3.507%. Two-year yields were 4.018%.

President Joe Biden and senior legislators failed to overcome an impasse on extending the $31.4 trillion U.S. debt ceiling, but they promised to meet again weeks before a historic default.

Ironically, uncertainty is fueling bond demand, yet T-Bills expiring early in June are unpopular and yield 5.6%, the highest in decades and above the Fed funds rate.

Investors worried the recent bounce was waning in China and Hong Kong after April’s dismal import statistics.

.HSI declined 0.4%. Shanghai Composite (.SSEC) and yuan fell 0.8%. Investors are also worried about a due diligence crackdown.

Foreign currency markets have been treading water as authorities’ rhetoric weighs against traders’ belief that U.S. interest rates and the dollar should fall.

On Tuesday, European Central Bank board member Isabel Schnabel argued rate cuts were inappropriate. Still, traders were reluctant to sell ahead of the CPI data, so the euro didn’t gain much versus the dollar.

Wednesday saw the common currency below $1.10. The dollar rose from recent lows on the Aussie, kiwi, and sterling to 135.14 yen.

“The dollar may receive a temporary boost after the CPI,” said Commonwealth Bank of Australia strategist Joe Capurso.

The debt limit turmoil and market players’ focus on rate reduction are unlikely to shift from one CPI data. “A strong result may push the dollar materially.”

Softbank (9434.T), Panasonic (6752.T), and a few of Japan’s biggest trading firms report earnings on Wednesday after market closure.

After reporting better-than-expected sales, Wynn Resorts (WYNN.O) shares remained stable after hours. However, after the bell, Airbnb (ABNB.O) shares plunged 12% after forecasting fewer reservations and cheaper rates.

Brent oil futures were $77.01. Bitcoin held at $27.732 as gold exceeded $2,000 an ounce.