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As Asian stocks traded in a narrow range on Tuesday, the dollar slipped ahead of a series of inflation prints that are expected to impact global monetary policy. Equities in South Korea and Taiwan saw gains, while US and UK markets were closed on Monday, and European shares edged higher in thin trading. S&P 500 futures also inched higher in early Asian hours.
In the commodities market, gold prices steadied as traders awaited US inflation data and oil advanced as focus shifted to an OPEC+ supply meeting and US demand at the beginning of the summer driving season.
This week, traders are closely watching fresh inflation data from various countries, including Australia, Japan, the euro region, and the US. Bank of Japan officials have indicated the potential for gradually raising interest rates as Japan’s April producer prices beat estimates.
The Federal Reserve’s preferred measure of underlying inflation is expected to show modest relief when it is released later in the week. Chair Jerome Powell has emphasized the need for more evidence that inflation is moving towards the 2% goal before easing policy. This week, US central bankers like John Williams, Lisa Cook, Neel Kashkari, and Lorie Logan are scheduled to speak.
Chinese property shares traded higher as Shanghai lowered down-payment ratios and the minimum mortgage threshold, aligning with the central government’s support for the property sector. With US and UK markets closed on Monday, European stocks took the spotlight, with carmakers and utilities leading a modest advance in the Stoxx Europe 600 index.
Looking ahead, the ECB is considering lowering borrowing costs at both its June and July meetings, with conflicting views among Governing Council members. Data this week may indicate an increase in headline inflation in the euro region.
In the coming days, key events to watch include IMF discussions with Ukrainian authorities, the South African election, Fed releases of economic surveys, and GDP data from various countries.
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