SYDNEY, May 15 (Reuters) – Asian stock markets opened the week on a cautious note as investors braced for the release of China’s industrial and retail sales data, while U.S. Federal Reserve officials awaited talks to justify the market price of rate cuts this year. .
S&P 500 futures and Nasdaq futures both fell 0.1% in early trade after a report on Friday showed US consumer sentiment fell to a six-month low in May and long-term inflation expectations rose to the highest since 2011, lifting the greenback and the greenback. Treasury yields.
In emerging markets, the Turkish lira fell to a two-month low after weekend elections, while the Thai baht rallied nearly 1% after Thailand’s opposition defeated military-allied parties in weekend polls.
On Monday, MSCI’s broadest index of Asia-Pacific shares outside Japan ( .MIAPJ0000PUS ) vacillated between losses and gains to finish up 0.1%. Japan’s Nikkei (.N225) bucked the trend with a 0.5% gain, building on last week’s optimism for the earnings season.
China’s blue-chip index (.CSI300) was flat in early trade, after a 2% slide last week, while Hong Kong’s Hang Seng index (.HSI) rose 0.3% and also took a 2.1% hit.
The country’s central bank kept interest rates on maturing medium-term policy loans unchanged on Monday, despite disappointing data last week that fueled worries about a global recession.
China is due to report monthly industrial production, retail sales and fixed asset investment data on Tuesday.
“A big year-over-year improvement shouldn’t be surprising when measured against a stagnant economy that has been in lockdown,” said Chris Weston, head of research at Pepperstone.
“However, China’s growth has been at the center of market moves as China data has thrown up some concerns of late – we’ve seen poor import, PPI and credit data -,” Weston said.
This week, several Federal Reserve officials are speaking out, including Chair Jerome Powell, who is set for Friday and could make plenty of headlines to move the dial further.
After last week’s CPI and PPI data supported the central bank’s pause as inflation eased, markets are still eyeing a 70 basis point cut in Fed funds rates and pricing by the end of the year.
Federal Reserve Governor Michelle Bowman said on Friday that if inflation remains high, the US Federal Reserve may need to raise interest rates further.
Joseph Capurzo, head of international economics at Australia’s Commonwealth Bank, believes the stability of US inflation will help price in near-term cuts in the funds rate and contribute to the dollar’s recovery in the coming months.
The U.S. dollar was hovering around a five-week high against major peers on Monday, extending its best weekly rise since the week before the first week of September. It rose 1.4% last week to 102.64 on global growth concerns.
Uncertainty about raising the U.S. debt ceiling and the return of banking concerns remained on investors’ minds. US President Joe Biden is expected to meet with congressional leaders on Tuesday for talks on raising the nation’s debt ceiling and avoiding catastrophic debt.
Concerns about the U.S. Congress not raising the debt ceiling in time have created major distortions at the short end of the yield curve, as investors have poured into alternative issues, avoiding bills due when Treasuries are at risk of running out of funds.
The yield on the benchmark 10-year note was unchanged at 3.4588% after rising 6 basis points on Friday, and the two-year yield fell 2 basis points to 3.9830%, up 10 basis points in the previous session.
Crude oil prices fell for the fourth consecutive session. U.S. crude was down 0.5% at $69.71 a barrel, while Brent crude was down 0.6% at $73.74.
Gold rose 0.2% to $2,014.95.49 an ounce.
Report by Stella Qiu; Editing by Sonali Pal
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