Asian stocks rose, led by Japan, after US stocks hit record highs on the back of Friday's inflation data.
The Nikkei Stock Average rose by up to 1.9% to a new all-time high after two consecutive days of declines. Chinese stocks, Hong Kong stocks, and Australian stocks rose. The move came after the Federal Reserve's preferred inflation measure for personal consumption spending was in line with expectations.
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“This is good news for non-USD assets and also for Asian stocks, which are still expected to grow, as we look forward to rate cuts this year and can discuss what the PCE inflation numbers mean. It should be,” said Puruksa Iamthongthorn, senior investment director for Asian equities at Abdon.
U.S. stock futures remained strong after the S&P 500 and Nasdaq 100 both closed at record levels, with Nvidia hitting a new high for the day. The two benchmarks ended February with his fourth straight month of gains.
U.S. Treasuries rose for the third straight session, supported by jobless claims data that showed a softening labor market. Traders also pointed to the possibility that short covering was behind the rally. The dollar index was little changed.
The yen fell against the dollar on Friday after Bank of Japan Governor Kazuo Ueda said the price target was not yet in sight. His comments could dampen speculation that the central bank could raise interest rates for the first time since 2007 as early as March.
“We are not yet in a situation where we can foresee achieving a sustained and stable inflation target,” Ueda said Thursday after a meeting with G20 central bank officials and finance secretaries in Sao Paulo, Brazil. Stated. “We will continue to seek confirmation whether a virtuous cycle of wages and prices has begun,” he said.
In South Korea, markets are closed on Fridays as it is a public holiday.
China's factory activity contracted for the fifth consecutive month in February, suggesting weak demand remains a drag on the economy. Measures of non-manufacturing activity were in expansion mode, helped by a recovery in travel and tourism during the recent long holiday.
The country's slump in home sales continued into February, even as regulators stepped up efforts to revive the troubled property market. Sales of new homes by the 100 major real estate companies decreased by 60% compared to the previous year.
Meanwhile, the US PCE report failed to shake up the broader disinflationary trend that supports expectations for rate cuts.
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“For a market focused on when the Fed will move to lower interest rates, this report is not a question of 'if' but 'when' the Fed will begin lowering rates in 2024,” said Quincy Crosby of LPL. It will help restore confidence.” Finance.
San Francisco Fed President Mary Daly said central bank officials were prepared to lower interest rates if necessary, but stressed there was no urgent need to cut rates given the strength of the economy. Rafael Bostic in Atlanta said the central bank could start cutting rates this summer.
Loretta Mester, head of the Federal Reserve Bank of Cleveland, said Thursday's inflation data showed policymakers are doing more to ease price pressures, but she also doubted the Fed would cut interest rates three times this year. He said his expectations remain unchanged.
Bitcoin held steady at around $61,000 as demand from exchange-traded funds (ETFs) continued. BlackRock Inc.'s iShares Bitcoin Trust recorded a record inflow of $612 million on Wednesday.
West Texas Intermediate crude oil was little changed on Friday. The U.S. Energy Information Administration said oil demand is likely to reach a four-year high in 2023 and remain around that level this year. Elsewhere, gold firmed after rising to a three-week high near $2,045 an ounce.
This week's main events:
- Eurozone S&P World Manufacturing PMI, CPI, Unemployment Rate, Friday
- BOE Chief Economist Hugh Pill speaks on Friday
- US Construction Spending, ISM Manufacturing, University of Michigan Consumer Sentiment, Friday
- Fed's Rafael Bostic and Mary Daly speak on Friday
The main movements in the market are:
stock
- As of 12:43 p.m. Tokyo time, S&P 500 futures were up 0.2%.
- Nikkei 225 futures (OSE) rose 1.5%
- Japan's TOPIX rose 1.1%
- Australia's S&P/ASX 200 rose 0.4%
- Hong Kong's Hang Seng rose 0.4%
- Shanghai Composite: Almost no change
- Euro Stoxx50 futures rise 0.5%
currency
- Bloomberg Dollar Spot Index little changed
- The euro rose 0.1% to $1.0817.
- The Japanese yen fell 0.2% to 150.33 yen to the dollar.
- The offshore yuan was almost unchanged at 7.2097 yuan to the dollar.
cryptocurrency
- Bitcoin fell 0.7% to $60,981.61.
- Ether rose 0.4% to $3,364.15
bond
- The 10-year government bond yield was almost unchanged at 4.24%.
- Japan's 10-year bond yield remains unchanged at 0.715%
- Australian 10-year bond yields fell 2 basis points to 4.12%.
merchandise
- West Texas Intermediate crude rose 0.3% to $78.53 per barrel.
- Spot gold rose 0.1% to $2,046.44 an ounce.
This article was produced in partnership with Bloomberg Automation.
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