Asian stock markets tracked gains in U.S. stocks and Treasuries ahead of the Federal Reserve’s inflation data due on Friday.
Japan’s stock index, the Topix, approached its highest level in 34 years. South Korean stocks rose, while Hong Kong futures fell slightly. The moves followed a weak performance in the previous trading day, when Hong Kong’s stock index fell for the first time in three days. U.S. stocks rose slightly on Thursday, a mixed day for large caps, with Amazon.com Inc. rising and Nvidia Inc. falling.
President Joe Biden and former President Donald Trump are set to face off in the first debate of the 2024 US presidential election later on Thursday, with their differing approaches on areas such as taxes, electric vehicles and cryptocurrencies likely to lead to market volatility.
U.S. Treasuries held on to gains from the previous day’s trading as lackluster U.S. economic data strengthened expectations that the Federal Reserve will cut interest rates this year to prevent the economy from slowing further. The yield on the 10-year Treasury note fell 4 basis points on Thursday to 4.29%.
The U.S. government revised down its first-quarter consumer spending forecast to an annualized 1.5 percent, after a separate report cited lower orders and shipments of certain business equipment, a weak job market and a drop in home buying.
“We expect both consumer and business activity to slow in the second half of 2024, giving the Fed ample opportunity to begin cutting rates later this year,” said Jeff Roach, chief economist at LPL Financial.
US forecast: May PCE inflation is welcome news for the Fed
Meanwhile, India is preparing to include its government bonds in JPMorgan Chase & Co.’s emerging markets index on Friday, opening up the $1.3 trillion market to a wider range of investors.
The yen was little changed in early trading, hovering near its nearly 40-year low against the dollar hit on Wednesday. The dollar index was flat on Friday, remaining near its highest level since November.
One rate cut
Atlanta Fed President Raphael Bostic said he still expects one rate cut this year amid signs that inflation is trending lower again. His forecast is in line with that of the Federal Open Market Committee. Earlier this month, Fed officials projected just one rate cut in 2024, which is the median forecast.
The swaps market is pricing in about 45 basis points of easing in 2024, equivalent to less than two rate cuts.
Economists expect Friday’s data to show the Fed’s preferred measure of underlying inflation slowed to a 2.6% annual rate from last month’s 2.8% — the lowest since March 2021 but above the Fed’s 2% inflation target.
“The consensus move would be in line with the view that reflationary pressures in early 2024 have abated and the cooling trend seen in late 2023 has resumed in the second quarter,” said Ian Lingen and Bayle Hartman of BMO Capital Markets. “Perhaps more importantly, investors are anticipating a series of inflation data that would gradually support a rate cut in September.”
In late New York trading, Nike Inc. shares fell after sales missed expectations. Walgreens Boots Alliance Inc. slumped 22% during regular hours after sharply cutting guidance. Chewy Inc. and Petco Health & Wellness Inc. both fell after Keith Gill, known as “Roaring Kitty,” posted a cartoon image of a dog on X.
In commodity markets, crude oil is set to rise for a third consecutive trading day on Friday, while gold maintained its gains from Thursday.
Major events this week:
Some of the key market developments:
stock
currency
Cryptocurrency
Bonds
merchandise
This story was produced with assistance from Bloomberg Automation.
This article has been generated from an automated news agency feed without any modifications to the text.
3.6 Million Indians visited us in a single day and chose us as their platform for Indian general election results. Check out the latest updates here!
