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Asian markets mixed ahead of US inflation data

inflation data

The US PCE index is forecast to have slowdown slightly in April from the previous month

Asian markets were mixed on Tuesday as investors took a breather after the previous day’s rally and as they braced for the release of crucial US inflation data later in the week.

In Europe, comments from top ECB officials reinforced hopes that borrowing costs in the eurozone will come down at its June meeting.

Figures last Friday showing US consumer confidence picking up and inflation expectations coming down provided traders enough confidence to propel hopes for at least one rate cut this year.

That has put a little downward pressure on the dollar against its major peers, with the yen also supported by growing speculation the BoJ will raise borrowing costs again within the next few months.

Currently, the focus on trading floors, however, is Friday’s release of the US PCE index – the Fed’s preferred gauge of inflation – which is forecast to have slowed down slightly in April from the previous month.

The figure comes after a number of monetary policymakers have lined up in the last few weeks to warn that they were cautious about reducing rates too soon and wanted to see more data proving price pressures were easing.

The next couple of days will see fresh comments from more central bank officials that investors hope will shine a light on their thinking.

While the Federal Reserve continues to debate when to move on rates, the European Central Bank appears set to make a cut with chief economist Philip Lane telling the Financial Times that “barring major surprises” the next direction will be downward.

That comes after eurozone inflation data for May, which is due on Friday.

In early trade, Hong Kong, Shanghai, Singapore, Seoul, Taipei and Jakarta all rose, though Tokyo, Sydney, Wellington and Manila edged down.

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