As Asian stocks prepare for a subdued opening on Monday, economic indicators from China highlight signs of a slowing US economy and weak demand in China. While consumer prices increased for the third consecutive month, industrial prices continued to decline. Credit decreased for the first time in April, as government bond sales slowed down and loan expansion was worse than anticipated. However, experts such as Larry Hu from Macquarie Group suggest that these statistics should not cause undue worry, as the significant drop in credit can be attributed to temporary factors rather than a marked worsening in the underlying economy. Global equities soared during the previous week, buoyed by positive earnings reports, particularly those related to artificial intelligence. In contrast, US ten-year treasury yields increased for a second successive week, despite one-year inflation expectations rising to 3.5%, the highest level recorded since November. The upcoming US inflation report for April represents the most significant event of this week, potentially determining whether the current stock market boom persists or halts. Market participants have revised their estimate of the number of Federal Reserve rate reductions from this year, to a greater extent than earlier anticipated. Following the release of Chinese policy rate data, the Eurozone is scheduled to present inflation and economic development results, whilst a variety of Federal Reserve authorities, including Chair Jerome Powell, are scheduled to speak. Other events scheduled include Australia’s business confidence, New Zealand’s food prices, inflation expectations, and Indian trade and Consumer Price Index (CPI). The US will also announce Producer Price Index (PPI), retail sales, business inventories, Empire Manufacturing, and CPI statistics. The Australian government will also reveal its fiscal year 2024-25 financial plan. Japanese GDP and industrial production data will also be released. Some of the major moves in markets currently involve:
– Stock indices: S&P 500 futures dropped 0.1%; Hang Seng futures fell 0.2%; S&P/ASX 200 futures decreased 0.2%; Nikkei 225 futures decreased 0.1%.
– Currency pairs: Euro to US dollar (EUR/USD) remained unchanged at $1.0773; Japanese yen to US dollar (USD/JPY) remained unchanged at 155.73; Offshore Chinese yuan to US dollar (USD/CNH) remained unchanged at 7.2341; Australian dollar to US dollar (AUD/USD) remained unchanged at $0.6603.
– Commodities: West Texas Intermediate crude decreased 0.3% to $78.04 a barrel; spot gold remained unchanged.
– Bonds: Yield on 10-year US Treasuries increased by four basis points to 4.50% on Friday.
– Cryptocurrencies: Bitcoin remained unchanged at $61,228.71; ether increased 0.2% to $2,929.09.
Note: All data and figures cited above were accurate as of the article’s publication date, i.e., 12 May 2024.
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