In China, the official manufacturing purchasing managers index expanded in March for the first time since September. The reading suggests that the world’s second-largest economy has maintained traction after a solid start to the year and may give policymakers more time to assess the impact of previous stimulus measures.
“The industrial sector seems to be resilient, partly helped by strong exports,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management. “If fiscal spending rises and exports remain strong, the economic momentum may improve.”
In the US, the Fed’s preferred gauge of inflation was “pretty much in line with our expectations,” Chair Jerome Powell said Friday, adding it wouldn’t be appropriate to lower rates until officials are sure inflation is in check. Investors are betting the US central bank will make that first cut in June.
The core personal consumption expenditures price index – which excludes volatile food and energy costs – rose 0.3% in February after climbing in the previous month, marking its biggest back-to-back gain in a year. The measure is up 2.8% from a year earlier, still above the Fed’s 2% target.
“You have a Fed that at the moment is highly data dependent,” said Matthew Luzzetti, chief US economist at Deutsche Bank. “Until we get either confirmation or a different view on what the data are going to be, it’s kind of hard to gauge exactly where we end up from a Fed policy perspective.”
Investors will also be keeping a close eye on Treasuries Monday as trading resumes during Asian hours. The dollar edged lower early Monday and was weaker against most currencies in a Group-of-10 peers.
Wall Street traders sent the S&P 500 to its 22nd record this year late last week. A $4 trillion surge in US equity values in just three months has startled doomsayers, while leaving a host of strategists scrambling to update their 2024 targets.
In commodities, gold edged higher while oil was little changed. Meanwhile, Bitcoin traded above $71,000. The largest digital currency has jumped almost 70% this year amid persistent demand for US exchange-traded funds holding the token.
