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Asian stocks rise ahead of U.S. core PCE data
Q1 PCE rose 3.3% (headline) and 3.6% (core), both 0.1% lower than initial estimates.
Weak GDP data and high interest rate concerns push U.S. stock futures down during Asian trading.
Chinese data shows weak business activity; manufacturing PMI at 49.5, non-manufacturing PMI at 51.1.
Big data week
Asian stocks rise ahead of U.S. core PCE data, widely expected to stay the same m/m at 0.3%, any surprises will create high volatility in the markets. The annual rate is expected to come in at 2.7%
Fed policymakers favor the PCE measure because it considers changes in consumer behavior, like when shoppers opt for cheaper items instead of more expensive ones.
On Thursday, the Commerce Department provided some modestly good news, reporting that the PCE for the first quarter increased by 3.3% on the headline measure and 3.6% on the core measure, both 0.1 percentage point lower than the initial estimates.
Moreover, weak gross domestic product data also heightened concerns about slowing economic growth and high interest rates. As U.S. stock index futures declined during Asian trading.
Meanwhile data in China pointed to weak business activity as the manufacturing PMI contracts to 49.5 vs 50.5 and 50.4 previous. The Non-manufacturing PMI also slowed to 51.1 vs 51.5 expected.
Markets factored in the likelihood of additional stimulus measures, turning bad news into good news for the market.
In Hong Kong, stocks outperformed as investors bought discounted tech stocks, Additionally, the Hang Seng was the best performer in Asia in May, rising nearly 4% for the month as investors sought more exposure to a potential Chinese economic recovery.
