Chinese stocks led a surge across most of Asia on Monday, buoyed by a generally positive global economic outlook. However, Japanese equities saw a decline as the yen held steady at levels prompting concerns about potential currency interventions.
U.S. stock futures indicated a strong opening following a market closure on Friday. The release of Federal Reserve data showing a continued decrease in their preferred inflation gauge fueled expectations for a rate cut in June.
Crude oil prices remained steady amid tightening supply-demand dynamics, supported by China's economic recovery and anticipation of output cuts by OPEC+. Mainland Chinese blue-chip stocks surged by 1.63% after a private survey revealed a robust expansion in the country's manufacturing sector in March, corroborating official data released over the weekend.
MSCI's broadest index of Asia-Pacific shares outside Japan experienced a slight uptick of 0.06%. Conversely, Japan's Nikkei dropped by 1.5% by midday, weighed down by concerns about potential intervention in currency markets, which could adversely affect exporter profitability and foreign investor returns.
U.S. S&P 500 futures rose by 0.33%, and Nasdaq futures focused on technology stocks increased by 0.54%.
Many markets remained closed on Monday due to Easter holidays, including those in Australia, Hong Kong, the United Kingdom, and Germany.
The recent tame inflation in the United States may provide validation for the Fed to initiate rate cuts sooner rather than later, according to Yeap Jun Rong, a market analyst at IG. Wall Street's pursuit of a new record high could sustain broader risk-on sentiment.
Positive Purchasing Managers' Index (PMI) data from China could contribute to the unwinding of bearish sentiments in the near term, Yeap added.
In the currency markets, the dollar slightly weakened against the yen to 151.27, remaining within its recent trading range. Official warnings of intervention have increased as the yen approached a 34-year low against the dollar, with Japanese Finance Minister Shunichi Suzuki reiterating on Monday that all options remain on the table against excessive currency movements.
The dollar index, which measures the U.S. currency against six major rivals, held steady at 104.50, near a six-week high reached last week. Bitcoin, the leading cryptocurrency, rose by 1.75% to $70,870.
In commodities, Brent crude increased by 29 cents to $87.29 a barrel, following a 2.4% gain the previous week. U.S. West Texas Intermediate crude traded at $83.48 a barrel, up by 31 cents, or 0.4%, following a 3.2% increase last week.
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