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What’s happening: Asian stocks rose on Friday after US stocks recorded sharp gains in the first quarter.
What happened: Stock markets in Japan, South Korea and China recorded gains on Friday, while Australia, Singapore and Hong Kong remained shut for the Good Friday holiday.
Acceleration in US inflation raised speculations of the Federal Reserve keeping interest rates higher for longer, supporting stock markets.
Why it matters: Wall Street ended the first quarter on a positive note, with equity values adding around $4 trillion in merely three months. The S&P 500 climbed to its 22nd record high in 2024 following the release of strong economic reports.
The S&P 500 surged past the 5,250 mark on Thursday, notching a quarterly gain of more than 10%. Two-year Treasury yields rose to 4.62% during the session, while the US dollar extended its quarterly gains.
US stocks remained volatile for most of the session on Thursday, ahead of the release of the Federal Reserve’s preferred inflation gauge on Friday. The headline annual inflation rate, as measured by personal consumption expenditures (PCE), accelerated to 2.5% in February, from 2.4% in the previous month amid rising personal spending.
Recent data released from Japan showed a moderation in consumer price growth, but it still remained well above the central bank’s inflation target. The Bank of Japan remains on course to consider another rate hike after increasing rates last month for the first time since 2007.
Japan’s Nikkei 225 gained 0.5% to close at 40,369.44 on Friday, while the USD/JPY forex pair slipped 0.03% to 151.33.
China’s Shanghai Composite index surged 1.01% to close at 151.33, while the Shenzhen index gained 0.62% to settle at 9,400.85.
What to watch: Investors await the release of economic data on China’s manufacturing PMI today. The Caixin China General Manufacturing PMI, which rose to 50.9 in February, is expected to increase further to a reading of 51 in March.
Context: The CAD/USD forex pair gained on Friday amid an increase crude oil prices.
Details: Data released last week showed Canada’s gross domestic product expanding 0.6% month-over-month in January, notching its fastest growth rate in a year. Canada’s economy is projected to have expanded by 0.4% in February.
Average weekly earnings of non-farm payroll employees climbed by 3.9% year-over-year to $1,228 in January. CFIB’s Business Barometer in Canada declined to 52.7 in March, from 55.1 in the prior month.
The Bank of Canada kept its benchmark interest rate unchanged at a 22-year high level of 5% since July. Traders widely expect the central bank to start lowering interest rates in June.
Strength in the price of crude oil, one of Canada’s major exports, lent support to the loonie on Monday. WTI crude oil prices gained around 0.4% to trade at $83.48 per barrel.
Weakness in the greenback also lent support to the CAD/USD forex pair on Friday. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell 0.03% to 104.52.
The CAD/USD pair gained 0.10% to 1.3527 on Friday.
What to watch: Investors await the release of economic data on Canada’s S&P Global manufacturing PMI and the Bank of Canada’s business outlook survey today. Analysts expect the S&P Global Canada manufacturing PMI to increase to 50.3 in March, from February’s reading of 49.7.
Markets will also continue monitoring movement in crude oil prices, which could significantly impact the CAD/USD forex pair ahead.
Other Markets: European indices closed higher on Thursday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 0.26%, 0.08%, 0.01% and 0.18%, respectively.
The Russian air force said it conducted a massive strike on Ukraine’s energy infrastructure and gas production facilities. The news sent the WTI crude oil prices higher in forex trading this morning.
Singapore’s private home prices rose by 1.5% in the first quarter, following a 2.8% increase in the prior quarter, which lent support to the SGD/USD forex pair.
The Philippines said that the S&P Global manufacturing PMI declined to 50.9 in March, from 51 in the prior month, sending the PHP/USD pair lower in forex trading this morning.
Thailand’s S&P Global manufacturing PMI rose to 49.1 in March, from 45.3 in February. The country’s factory activity remaining in the contraction zone for the eighth straight month exerting pressure on the THB/USD forex pair.
Japan’s au Jibun Bank manufacturing PMI rose to 48.2 in March, compared to a final reading of 47.2 a month ago, which sent the JPY/USD pair higher in forex trading this morning.
Russia’s S&P Global manufacturing PMI, Turkey’s Istanbul Chamber of Industry manufacturing PMI, Brazil’s S&P Global manufacturing PMI, US S&P Global manufacturing PMI, construction spending, and ISM manufacturing PMI, Mexico’s S&P Global manufacturing PMI, China’s current account, Spain’s new car sales, as well as South Africa’s total vehicle sales.
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