Asian equity markets are expected to open higher following the Federal Reserve's announcement that it is not in a hurry to reduce interest rates, opting to wait for more evidence of inflation control.
Futures for the Nikkei 225 index showed positive movement, despite markets in Australia and Hong Kong being closed for holidays. This optimism comes after the Federal Reserve's latest comments on inflation and interest rates, with Chair Jerome Powell stating that rate cuts would not be considered until inflation is reliably on track to the 2% target. This has led investors to anticipate a potential rate cut as early as June.
Deutsche Bank's chief US economist, Matthew Luzzetti, highlighted the Fed's current reliance on incoming data to shape its policy decisions, emphasizing the uncertainty of future outcomes without clear data trends.
Meanwhile, China's manufacturing sector showed signs of expansion for the first time in six months, as reported by the National Bureau of Statistics. This growth could indicate sustained economic momentum for China, giving policymakers more room to evaluate the effects of previous stimulus measures amidst challenges like the ongoing property sector slump and deflationary pressures.
Zhang Zhiwei, chief economist at Pinpoint Asset Management, noted the resilience of China's industrial sector, bolstered by strong exports and potential increases in fiscal spending.
As trading resumes in Asian markets, investors will closely monitor Treasuries. The dollar experienced mixed movements against major currencies, ending the quarter with a slight increase in strength. The S&P 500's recent performance and a $4 trillion surge in US equity values have defied negative predictions, prompting analysts to revise their forecasts for 2024.
Bitcoin's value has risen nearly 70% this year, driven by continuous demand for US exchange-traded funds holding the cryptocurrency. This week, key economic indicators and reports across various countries will be closely watched by investors for further market insights.
Upcoming Key Events:
- Manufacturing and economic indicators from China, Japan, Indonesia, and other countries.
- Market and economic reports from the US, including construction spending, ISM Manufacturing, and nonfarm payrolls.
- Central bank reports and consumer sentiment surveys from Canada and the Eurozone.
Market movements will also be influenced by currency fluctuations, bond yields, and commodity prices, with investors keeping an eye on gold, the Bloomberg Dollar Spot Index, and major currencies.
Bitcoin and Ether are among the cryptocurrencies to watch, as their values continue to impact the investment landscape.
This article was produced without human intervention using Bloomberg Automation.
