By Gina Lee
Investing.com – Asia Pacific stocks were mostly up Tuesday morning as investors digested more Chinese economic data released earlier in the day, and await key U.S. economic data, due later in the day, to gauge the country’s economic outlook.
China’s Shanghai Composite was down 0.26% by 10:25 PM ET (2:25 AM GMT) while the Shenzhen Component inched up 0.02%. The People’s Bank of China forced banks to hold more foreign currencies in reserve for the first time in more than a decade in order to curb the appreciation of the yuan.
Hong Kong’s Hang Seng Index rose 0.38%.
In Australia, the ASX 200 was down 0.48% as investors await the Reserve Bank of Australia (RBA) to hand down its policy decision later in the day. Investors expect that RBA will maintain its loose monetary policy but is likely to be closed to a decision on whether the economy is strong enough to join a group of central banks, including the Bank of Canada and the Reserve Bank of New Zealand, in reducing its emergency stimulus measures.
In China, data released earlier in the data said the Caixin Manufacturing Purchasing Managers Index (PMI) in May was 52, slightly higher than the 51.9 in forecasts prepared by Investing.com and April’s figure. The Caixin reading was also higher than the manufacturing PMI’s 51.0 reading released on Monday by China’s National Bureau of Statistics. But both manufacturing PMIs were above the 50-mark indicating growth.
Although the U.S., China and parts of Europe continue their economic recovery from COVID-19, investors remain concerned that price pressure will force central banks to slow down their stimulus measures earlier than expected.
“We believe the market has been premature in scaling back the reflation trade simply because some commodities and U.S. Treasury yields have experienced a correction,” Eric Robertsen, chief strategist at Standard Chartered (OTC:SCBFF) Bank, told Bloomberg.
A slew of U.S. Federal Reserve officials is due to speak on Wednesday, including Philadelphia Fed President Patrick Harker, Chicago Fed President Charles Evans, Atlanta Fed President Raphael Bostic and Dallas Fed President Robert Kaplan. This is the last chance for officials to speak on policy before a backout period beginning Jun. 5. The Fed’s next meeting will be on Jun. 16.
On the data front, investors are now focusing on U.S. data, including the Institute of Supply Management Manufacturing PMI, due later in the day. Further data include nonfarm payrolls and the unemployment rate in May, due to be released on Friday.
Asia Stocks Up Following Positive Caixin Chinese Data
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