(Bloomberg) — Asian stocks rose Tuesday as the dollar fell ahead of a string of inflation that is expected to impact the direction of global monetary policy.
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The MSCI AC Asia-Pacific Index rose, with stocks in Hong Kong leading gains in Asia. Markets in Japan and Australia saw a slight decline. US and UK markets were closed on Monday and European stocks rose in thin trading. S&P 500 futures rose.
Chinese real estate stocks rose after financial hub Shanghai cut down payment rates and minimum mortgages, with major Chinese cities pursuing central government aid to the real estate sector. Technology stocks rose in China as major Chinese state banks said they would invest a combined 114 billion yuan ($15.7 billion) in a semiconductor investment fund.
The dollar fell for a third day and fell against all its G10 peers, while the 10-year Treasury yield remained stable.
This week, traders will study new inflation data from Australia, Japan, the Eurozone and the United States. Bank of Japan Governor Kazuo Ueda and his deputy have indicated there is room to gradually raise interest rates now that the country has shifted away from 0% inflation. Producer prices in Japan for April beat estimates, jumping 2.8% from a year earlier.
“Things will get better tonight when the US opens up, and then I think the next few days, all else being equal, will be driven by end-of-month inflows and then the PCE release,” said Kyle Rodda, a senior US investment officer. the important”. Market Analyst at Capital.Com Inc. “All we see are the usual ebbs and flows of the market when there's not much going on and no one's really around.”
The Fed's preferred measure of core inflation is expected to show modest relief when it arrives on Friday. Bank Chairman Jerome Powell stressed the need for more evidence that inflation is on its way to the 2% target before policy can be eased. Among the US central bankers scheduled to speak this week are John Williams, Lisa Cook, Neel Kashkari and Lori Logan.
In commodities, gold stabilized as traders awaited US inflation data. Oil advanced as focus shifted to Sunday's OPEC+ supply meeting and US demand at the start of the summer driving season. Copper resumed its rise as China intensified efforts to rescue its real estate market and as the dollar weakened. Wheat briefly touched its highest level in more than nine months due to fears of shrinking inventories.
With US and UK markets closed on Monday, the spotlight was on European stocks, with automakers and utilities leading modest advances in the Stoxx Europe 600. Trading value was less than half the 20-day average for this time of day.
Governing Council member Francois Villeroy de Galhau said the ECB should not rule out cutting borrowing costs at its June and July meetings, pushing back against fellow monetary officials who are uncomfortable with the idea of successive cuts. Chief economist Philip Lane told the Financial Times that the central bank will have to keep policy restrained until 2024, even with the possibility of an interest rate cut next month.
While a rate cut by the ECB in June was widely announced, subsequent steps are less clear given uncertainty over wage growth and factors such as fighting in the Middle East. Data this week may show headline inflation in the euro zone rose in May.
Read more: About the 'T+1' rule that makes US stocks flat in one day: QuickTake
The “T+1” rule that has the potential to cause problems for foreign investors will come into effect when traders return from the long weekend – making US stocks settle in one day instead of two.
Some key events this week:
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The International Monetary Fund is holding discussions with Ukrainian authorities to review economic policies as the country seeks to release the next batch of $2.2 billion in aid, on Monday.
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Cleveland Fed President Loretta Mester speaks at a Bank of Japan event in Tokyo. Minneapolis Fed President Neel Kashkari and ECB Governing Council member Klaas Knott address the Barclays-CEPR International Monetary Policy Forum, Tuesday.
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The presidential elections in South Africa are the most important since the end of apartheid, Wednesday
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The Fed will release its “Beige Book” economic survey on Wednesday
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South Africa Interest Rate Decision, US Initial Jobless Claims, GDP, Wholesale Inventories, Thursday
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New York Fed President John Williams speaks at the Economic Club of New York on Thursday
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GDP data for Canada, the Eurozone and Turkey were published on Friday
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Unemployment in Japan, CPI in Tokyo, industrial production, retail sales, Friday
Some key movements in the markets:
Stores
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S&P 500 futures rose 0.1% as of 11:40 a.m. Tokyo time
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Nasdaq 100 futures rose 0.2%
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Japan's Topix index fell 0.1%.
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Australia's S&P/ASX 200 index fell 0.2%.
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The Hang Seng Index in Hong Kong rose 0.6%.
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The Shanghai Composite Index was little changed
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Euro Stoxx 50 futures rose 0.2%
Currencies
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The Bloomberg Dollar Spot Index fell 0.1%.
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The euro rose 0.2 percent to $1.0876
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There was little change in the Japanese yen at 156.74 to the dollar
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There was little change in the yuan in external transactions at 7.2593 to the dollar
Digital currencies
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Bitcoin fell 1.4% to $68,618.91
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Ethereum fell 0.7% to $3,862.5
Bonds
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The yield on 10-year Treasury bonds was little changed at 4.46%.
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The yield on 10-year Japanese bonds rose one basis point to 1.035%.
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The 10-year Australian bond yield fell two basis points to 4.26%.
Goods
This story was produced with assistance from Bloomberg Automation.
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