Stocks Rise, Dollar Falls Ahead of Inflation Data: Markets Fall (Bloomberg) – Yahoo Finance

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(Bloomberg) — Asian stocks rose, heading for their second day of gains Tuesday, as the dollar slipped ahead of a series of inflation numbers expected to influence the direction of global monetary policy.

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The MSCI AC Asia Pacific Index rose, with Hong Kong stocks leading the gains. US and European stock futures remained firm. The Bloomberg Dollar Index is down for a third day, against all of its Group of 10 peers, as investors mull the prospects of lower U.S. interest rates. The Australian currency outperformed. The 10-year Treasury yield remained stable.

“The upbeat risk-on tone weighed on the US dollar and supported the Australian dollar,” Peter Dragicevich, APAC currency strategist at Corpay, wrote in a note. “If we are correct in our assessment that the US PCE core deflator moderates, Chinese PMIs improve and/or statistical quirks see eurozone inflation reaccelerate, we think the dollar could lose field later in the week.”

Chinese real estate stocks rose after Shanghai lowered down payment rates and the minimum mortgage threshold, as China’s biggest cities implement central government aid to the real estate sector. Technology stocks in China rose as China’s major state banks announced they would invest a total of 114 billion yuan ($15.7 billion) in a semiconductor investment fund.

Traders will be studying new inflation data this week, from Australia to Japan, the Eurozone and the United States. Bank of Japan Governor Kazuo Ueda and his deputy have indicated that it is possible to gradually raise interest rates now that the country has moved away from a 0% inflation norm. Japan’s producer prices in April beat estimates, jumping 2.8% from a year earlier.

“Things will improve tonight as the markets open in the US, then I suspect the next few days, all things being equal, will be driven by end of month flows and then the crucial release of the PCE index,” said Kyle Rodda, a market official. market analyst at Capital.Com Inc. “All we see are the usual tidal currents in the market when not much is happening and no one is really there.”

The Federal Reserve’s preferred measure of underlying inflation is expected to show slight relief when it arrives Friday. Chairman Jerome Powell has stressed the need for more evidence that inflation is on track to meet the 2% target before easing policy. John Williams, Lisa Cook, Neel Kashkari and Lorie Logan are among the US central bankers scheduled to speak this week.

In the commodities sector, gold has stabilized. Oil advanced as focus shifted to an OPEC+ supply meeting on Sunday and U.S. demand as the summer season begins. Copper has resumed its rally as China steps up efforts to save its real estate market and the dollar weakens. Wheat briefly rose to its highest level in more than nine months on concerns over dwindling inventories. Palm oil is heading for its highest close since late April as shipments from major Southeast Asian producers are expected to increase to meet renewed demand from major buyers.

The ECB should not rule out lower borrowing costs at its June and July meetings, Governing Council member François Villeroy de Galhau said, opposing his fellow monetary policymakers. comfortable with the idea of ​​consecutive reductions. Chief economist Philip Lane told the Financial Times that the central bank will need to maintain its restrictive policy until 2024, even with the prospect of an interest rate cut next month.

Although an ECB rate cut in June has been 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 that headline inflation in the euro zone rose slightly in May.

Read more: About the ‘T+1’ rule that allows US stocks to settle in one day: QuickTake

The “T+1” rule, which risks causing problems for foreign investors, comes into effect when traders return from the long weekend, causing U.S. stocks to settle in one day rather than two.

Some notable events this week:

  • The IMF is talking to Ukrainian authorities on Monday to review their economic policies as the country seeks to release the next tranche of $2.2 billion in aid.

  • Cleveland Fed President Loretta Mester speaks at BOJ event in Tokyo; Minneapolis Fed President Neel Kashkari and ECB Governing Council member Klaas Knot will address the Barclays-CEPR International Monetary Policy Forum on Tuesday.

  • South African elections, the most significant since the end of apartheid, on Wednesday

  • The Fed publishes its economic survey in the Beige Book on Wednesday

  • South Africa rate decision, US initial jobless claims, GDP and wholesale stocks, Thursday

  • New York Fed President John Williams speaks at the Economic Club of New York on Thursday.

  • GDP data released Friday for Canada, Eurozone and Turkey

  • Japan unemployment, Tokyo CPI, industrial production, retail sales, Friday

Some of the main market movements:

Actions

  • S&P 500 futures rose 0.2% as of 1:40 p.m. Tokyo time

  • Nasdaq 100 futures rose 0.3%

  • The Japanese Topix has changed little

  • Australia’s S&P/ASX 200 fell 0.2%

  • Hong Kong’s Hang Seng rose 0.6%

  • The Shanghai Composite has changed little

  • Euro Stoxx 50 futures rose 0.3%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.1%

  • The euro rose 0.2% to $1.0880

  • The Japanese yen rose 0.1% to 156.69 per dollar

  • The offshore yuan was little changed at 7.2577 per dollar.

Cryptocurrencies

  • Bitcoin fell 2.7% to $67,726.88

  • Ether fell 1.3% to $3,837.44

Obligations

  • The yield on 10-year Treasury bills changed little at 4.46%

  • The Japanese 10-year yield rose a basis point to 1.035%

  • The Australian 10-year yield was little changed at 4.27%

Raw materials

This story was produced with the help of Bloomberg Automation.

–With help from Hooyeon Kim and Ruth Carson.

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