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Asia markets rise, US inflation data in focus

Asia stock markets

Focus is now turning to the release of the US PCE index, which is the Fed’s preferred gauge of inflation

Asian markets rose Monday, tracking a bounce on Wall Street at the end of a painful week for investors, with focus now on the upcoming release of crucial US inflation figure.

Sentiment took a blow last week after Fed officials warned they wanted more evidence that prices were being brought under control, fuelling concerns they might not reduce interest rates this year.

That was compounded by figures indicating the US economy remained in rude health, despite borrowing costs being kept at two-decade highs.

But the S&P 500 and Nasdaq both benefited Friday from figures showing one-year expectations for prices dropped marginally, while consumer sentiment improved.

The positivity followed through to Asia, which was also boosted by news that profits at China’s industrial firms increased in April, having declined the month before.

Hong Kong, Tokyo, Shanghai, Sydney, Seoul, Mumbai, Singapore, Bangkok and Taipei all gained, though there were some losses in Jakarta, Manila and Wellington.

Paris and Frankfurt gained in the morning. London was shut for a holiday.

Markets continue to consolidate while global investors remain discerning on signs of US economic health and Fed’s plausible monetary path, according to Edward Ng, of Nikko Asset Management.

Focus is now turning to the release of the US PCE index, which is the Fed’s preferred gauge of inflation.

Investors will look to US Personal Consumption Expenditures figure this Friday as a potential signpost for further market directions, Ng said.

The reading comes after the CPI edged down in April, having come in above forecasts for each of the previous three months.

Also coming up is the Federal Reserve’s Beige Book on the state of the economy, which will be pored over for an idea about the bank’s thinking on monetary policy.

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