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Business News/ Markets / Stock Markets/  Asian Stocks Gain as Data Reinforce Fed Rate Path: Markets Wrap
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Asian Stocks Gain as Data Reinforce Fed Rate Path: Markets Wrap

Asian equities rose on Monday as US inflation figures did little to alter views that the Federal Reserve will cut interest rates this year.

Asian Stocks Gain as Data Reinforce Fed Rate Path: Markets WrapPremium
Asian Stocks Gain as Data Reinforce Fed Rate Path: Markets Wrap

(Bloomberg) -- Asian equities rose on Monday as US inflation figures did little to alter views that the Federal Reserve will cut interest rates this year.

South Korean stocks advanced while Japanese shares traded in a narrow range after a report showed confidence among the country’s large manufacturers weakened slightly for the first time in four quarters. Contracts for US equities gained while markets in Australia and Hong Kong remained shut for a holiday. 

In China, the official manufacturing purchasing managers index expanded in March for the first time since September. The reading suggests that the world’s second-largest economy has maintained traction after a solid start to the year and may give policymakers more time to assess the impact of previous stimulus measures.

“The industrial sector seems to be resilient, partly helped by strong exports," said Zhang Zhiwei, chief economist at Pinpoint Asset Management. “If fiscal spending rises and exports remain strong, the economic momentum may improve."

Treasury yields dropped slightly Monday in Asia after Fed Chair Jerome Powell said Friday the central bank’s preferred gauge of inflation was “pretty much in line with our expectations." Powell added that it wouldn’t be appropriate to lower rates until officials are sure inflation is in check. Investors are betting the US central bank will make that first cut in June. The dollar edged lower, weakening against most currencies in a Group-of-10 peers.

The core personal consumption expenditures price index — which excludes volatile food and energy costs — rose 0.3% in February after climbing in the previous month, marking its biggest back-to-back gain in a year. The measure is up 2.8% from a year earlier, still above the Fed’s 2% target.

“You have a Fed that at the moment is highly data dependent," said Matthew Luzzetti, chief US economist at Deutsche Bank. “Until we get either confirmation or a different view on what the data are going to be, it’s kind of hard to gauge exactly where we end up from a Fed policy perspective." 

Wall Street traders sent the S&P 500 to its 22nd high this year late last week. A $4 trillion surge in US equity values in just three months has startled doomsayers, while leaving a host of strategists scrambling to update their 2024 targets.

In commodities, gold climbed while oil was largely steady. Meantime, Bitcoin traded above $71,000. The largest digital currency has jumped almost 70% this year amid persistent demand for US exchange-traded funds holding the token.

Key events this week:

Some of the main moves in markets:

Stocks

Currencies

Cryptocurrencies

Bonds

Commodities

This story was produced with the assistance of Bloomberg Automation.

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

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Published: 01 Apr 2024, 06:45 AM IST
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