(Bloomberg) — Asian stocks are expected to follow their U.S. counterparts higher after U.S. consumers moderated their inflation expectations, reinforcing sentiment that the Federal Reserve may have room to cut rates this year.
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Stock futures in Australia, Japan and Hong Kong all point to early gains on Monday, while Chinese contracts slipped. U.S. futures remained flat after the S&P 500 rose 0.7% on Friday, ending a two-day decline.
The moves suggest renewed optimism after the Asian stock index suffered its worst week in more than a month, as concerns over whether the Fed will cut rates this year grew alongside doubts about the implementation and effectiveness of a real estate rescue plan in China.
“Given the rebound in U.S. markets, Asian stock markets will open reasonably well,” said Tony Sycamore, an analyst at IG Markets in Sydney. “Risk sentiment looks reasonably good today.”
Traders will be closely watching Bank of Japan Governor Kazuo Ueda’s speech on Monday for clues on the central bank’s policy outlook, as markets weigh the possibility of another rate hike this year . The yen fluctuated around 157 per dollar on Friday as Japan’s top foreign exchange official reiterated his stance to take action against excessive movements.
Wall Street saw some relief, however, as University of Michigan data showed consumers expect prices to rise at an annual rate of 3.3% over the next year, down from compared to the 3.5% expected earlier in the month. Treasuries barely moved after Fed Governor Christopher Waller said he still thinks the neutral interest rate is relatively low, while warning that unsustainable fiscal spending could change that trend .
In a low-volume session ahead of the Memorial Day long weekend, the S&P 500 rebounded from a two-day decline while the Nasdaq 100 hit a new all-time high, led by Nvidia Corp.’s gains. The Exchange Commission has cleared the way for the possible launch of the first U.S. exchange-traded funds investing directly in Ether.
The dollar fell slightly in Asia on Monday as Treasury bond trading was closed. With US markets closed on Monday, the “T+1” rule will come into effect when traders return from the holiday weekend, allowing US stocks to balance in one day rather than two.
Read more: About the ‘T+1’ rule that allows US stocks to settle in one day: QuickTake
Elsewhere this week, investors will pay close attention to Chinese industrial profits and PMI data to help gauge the health of the world’s second-largest economy. A raft of inflation figures from Australia to Japan and the Eurozone are also due as traders place fine bets on the outlook for monetary policy.
“A firmer reading from the eurozone will not deter expectations of a rate cut on June 6,” said Marc Chandler, chief market strategist at Bannockburn Global. “Moreover, a rise in Tokyo’s figures will not impact the BOJ’s expectations.”
Some of the main market movements:
Actions
S&P 500 futures were little changed as of 7:45 a.m. Tokyo time.
Hang Seng futures rose 0.4%
S&P/ASX 200 futures rose 0.6%
Nikkei 225 futures rose 0.5%
Currencies
The euro was little changed at $1.0850
The Japanese yen was little changed at 156.91 per dollar.
The offshore yuan was little changed at 7.2616 per dollar.
The Australian dollar was little changed at $0.6633.
Cryptocurrencies
Bitcoin little changed at $68,654.23
Ether fell 0.2% to $3,849.85
Obligations
Raw materials
West Texas Intermediate crude rose 0.1% to $77.83 a barrel
Spot gold rose 0.2% to $2,339.01 an ounce
This story was produced with the help of Bloomberg Automation.
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