Asian stocks are on the rise as investors eagerly await the latest U.S. core PCE data. The first quarter PCE figures have shown a slight decrease from initial estimates, with the headline rising by 3.3% and the core by 3.6%. This news, coupled with concerns over weak GDP data and high interest rates, has pushed U.S. stock futures down during Asian trading.
Chinese data also indicates weak business activity, with manufacturing PMI at 49.5 and non-manufacturing PMI at 51.1. The markets are anticipating the U.S. core PCE data to remain stable month-on-month at 0.3%, with any surprises likely to cause high volatility. The annual rate is expected to come in at 2.7%.
Fed policymakers prefer the PCE measure due to its consideration of changes in consumer behavior, such as shifts towards cheaper items. The Commerce Department’s report on the first quarter PCE figures revealed a slight decrease from initial estimates, with the headline at 3.3% and the core at 3.6%.
With concerns over slowing economic growth and high interest rates, U.S. stock index futures have declined during Asian trading. China’s weak business activity, as indicated by the PMI figures, has added to the market’s cautious sentiment.
Market participants are factoring in the possibility of additional stimulus measures, which has helped turn negative news into positive market sentiment. In Hong Kong, investors have been buying discounted tech stocks, leading to stock outperformance. The Hang Seng was the best performer in Asia in May, rising nearly 4% as investors sought exposure to a potential Chinese economic recovery.
As the market focus shifts to the PCE data, gold prices have held steady around $2,360. The U.S. Q1 GDP growth has been revised to 1.3%, and Germany’s inflation rate rose to 2.4% in May. Despite facing pressure in the Asian session, gold prices are showing signs of rebounding from two-week lows.
Market analysts are closely watching the U.S. consumer confidence, which improved in May. The ECB’s potential second rate cut in July is also being discussed, with market participants keeping a close eye on any developments. Goldman Sachs has revised its Fed cut timeline as economic strength persists, with gold prices hovering near two-week lows.
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