(Bloomberg) — Asian equities headed for a cautious start on Friday after US stocks ended February with fresh highs as the Federal Reserve’s preferred inflation gauge met consensus forecasts.
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Share futures for Japan and Australia were moderately higher while those for Hong Kong edged slightly lower. The Golden Dragon index of US-listed Chinese companies fell in New York trading Thursday.
The S&P 500 advanced 0.5% and the Nasdaq 100 rose 1% with both indexes closing at record levels, helped along by Nvidia Corp., which also set its highest closing price Thursday. The two benchmarks ended February with their fourth consecutive monthly advance.
Stocks were buoyed by US personal consumption expenditures index data released Thursday. Although it showed underlying inflation running at the fastest pace in a year, the reading met consensus expectations from economists and failed to dent the broader dis-inflationary trend underpinning rate-cut forecasts.
“For markets keenly focused on when the Fed will transition toward easing rates, this report will help restore confidence that it isn’t ‘if’ the Fed will begin to cut rates in 2024, but ‘when’,” said Quincy Krosby at LPL Financial.
Federal Reserve Bank of San Francisco President Mary Daly said central bank officials are ready to lower interest rates as needed but emphasized there’s no urgent need to cut given the strength of the economy. Her Atlanta counterpart Raphael Bostic said the central bank could begin cutting this summer.
Treasuries were slightly higher in US trading for a second session, helped along by jobless claims data that indicated labor-market softening. Traders also pointed to the possibility that short covering was behind the gains.
An index of the dollar was little changed. The yen strengthened to end Thursday just below the 150 per dollar level. Bitcoin held at above $61,000 as fresh appetite for the cryptocurrency rippled across markets while BlackRock Inc.’s iShares Bitcoin Trust netted a record $612 million inflow on Wednesday.
In Asia, data due Friday include Japan’s jobless rate for January, PMIs for Taiwan and China, inflation data for Indonesia and Pakistan, and Hong Kong retail sales. Markets are closed in South Korea.
The Bank of Japan will likely wait until April before terminating the world’s last negative interest rate, rather than moving later this month, according to Kazuo Momma, a former executive director in charge of monetary policy at the central bank.
In China, a home sales slump dragged on in February, even as regulators stepped up efforts to salvage the beleaguered property market. The value of new home sales from the 100 biggest real estate companies slid 60% from a year earlier.
West Texas Intermediate, the US oil price, fell slightly. The US Energy Information Administration said oil demand touched a four-year high in 2023 and would likely hold near that level this year. Elsewhere, gold rose to a three-week high to trade at around $2,044 per ounce.
Key Events This Week:
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China official PMI, Caixin manufacturing PMI, Friday
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Eurozone S&P Global Manufacturing PMI, CPI, unemployment, Friday
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BOE chief economist Huw Pill speaks, Friday
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US construction spending, ISM Manufacturing, University of Michigan consumer sentiment, Friday
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Fed’s Raphael Bostic and Mary Daly speak, Friday
Some of the main moves in markets:
Stocks
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0804
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The Japanese yen was little changed at 149.99 per dollar
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The offshore yuan was little changed at 7.2077 per dollar
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The Australian dollar was unchanged at $0.6497
Cryptocurrencies
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Bitcoin fell 0.4% to $61,210.38
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Ether was little changed at $3,352.09
Bonds
Commodities
This story was produced with the assistance of Bloomberg Automation.
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