Stocks in Asia were mostly higher overnight but the Nikkei (^N225) lost 0.1% on the day in Tokyo despite data showing Japan’s PPI inflation coming in at 4.0% in April as expected.

The Hang Seng (^HSI) rose 2.2% in Hong Kong and the Shanghai Composite (000001.SS) was 0.9% up by the end of the session. The Kospi (^KS11) also rose 1.2%

Elsewhere, Australia’s Q1 wage index came in stronger than anticipated, up 0.9% quarter-on-quarter, compared to the 0.8% expected, and yields on 10-year Australian government bonds are up 4.1bps this morning.

Across the pond on Wall Street, the S&P 500 (^GSPC) rose 0.7%, which has only just turned positive for 2025 again, and the tech-heavy Nasdaq (^IXIC) was 1.6% higher. The Dow Jones (^DJI) slipped 0.6%.

It comes as markets continue to dial back expectations for cuts from the US Federal Reserve this year, driven by the broader risk-on tone and lower recession fears, rather than the soft inflation print.

Futures were only expecting 53bps of cuts by the December meeting, which was -3.2bps lower on the day, and the fewer cuts priced for this year since February.

President Donald Trump continued to call for lower rates, saying in a post that “THE FED must lower the RATE, like Europe and China have done.”

Economists will be watching tomorrow’s PPI data closely for categories that feed through into core PCE, the Fed’s preferred inflation gauge. Deutsche Bank said it now sees April core PCE tracking at +0.23% month-on-month, which would be consistent with the year-on-year rate remaining at 2.6%.