Asian Stocks Rise Before US, Europe Inflation Data.

European stock futures were flat and Asian shares rose as traders awaited key inflation data in the region as well as the US later on Friday. 

Euro Stoxx 50 futures were little changed, while contracts for US stocks slipped 0.2% after the S&P 500 fell on Thursday, driven by tech-sector losses. In Asia, stock benchmarks climbed in Hong Kong, Japan and Australia, with the MSCI Asia Pacific Index on track to gain about 2% for the month.

Chinese stocks rose, looking past the weakness in economic data. Asia’s largest economy saw official manufacturing and non-manufacturing PMIs miss estimates Friday, with the former falling back into contraction.

The PMI data in China “definitely has an impact on the pace of fiscal and monetary policy to follow,” said Wendy Chen, senior investment analyst at GAM Investment Management Switzerland Ltd., on Bloomberg Radio. “We are expecting to hear more policy support to address the property and lingering inventory problem” in the country, she said.

A slowdown in growth in the US, weak manufacturing activity in China and a contraction in industrial output in Japan illustrate the growing challenge for central bankers debating their next steps — but also embolden investors betting on easing of monetary conditions across the world.

Equities in Asia likely got a boost from passive flows ahead of the changes in MSCI Standard Indexes on Friday as well as month-end rebalancing. “Generally, when these flows occur at the end of the month, they are often reversed in the opening sessions of the new month,” said Tony Sycamore, market analyst at IG Australia Pty.

The dollar and US Treasuries were steady ahead of the release of the Fed’s favourite price gauge and following a report that showed the US economy grew at a softer pace — as both spending and inflation were marked down.

With markets expecting the core PCE measure to ease slightly in April from a month ago, anything less “could weigh on the US dollar modestly,” said Kristina Clifton, a senior economist and strategist at Commonwealth Bank of Australia in Sydney.

The yen fluctuated after Japan’s industrial output in April fell, while the nation’s jobless rate was unchanged. Still, Inflation in Tokyo — a barometer for the wider country — accelerated in May, keeping the Bank of Japan largely on track to consider a rate hike in the coming months. Money markets are pricing about 29 basis points of rate hikes by year-end, up from 20 basis points at the start of May, according to data compiled by Bloomberg.

Trump Verdict

Elsewhere, a jury found Donald Trump guilty on all 34 counts of falsifying business records at his hush-money trial, making him the first former US president to be convicted of crimes. With Trump due to face sentencing on July 11, the conviction creates a daunting legal and political path as he faces President Joe Biden in November as the presumptive Republican nominee.

“Expectations for a guilty verdict were somewhat priced into markets,” Paresh Upadhyaya, director of fixed income and currency strategy at Amundi Asset Management in Boston. “The bigger impact to markets could be if this guilty verdict begins to turn the momentum away from Trump to Biden.”

Source: https://finance.yahoo.com/news/asian-stocks-eye-early-gain-224149592.html