Asian equities were flat, as the risk of Japanese intervention in the currency market dampened the strength of the US dollar

(1) Asian stock markets fluctuated on Monday as investors worried that U.S. inflation data released this week could undermine the prospects for interest rate cuts, while the risk of Japanese intervention in the currency market temporarily halted the yen's decline. (2) The main data of the week will be the US core personal consumption expenditures (PCE) price index, which will be released on Friday. Core PCE is expected to rise 0.3% in February from the previous month and 2.8% from a year earlier. Any higher-than-expected performance would be seen as a blow to hopes of a June rate cut by the US Federal Reserve. (3) Friday is Easter and many markets are closed, so the full reaction to the PCE data released at that time will have to wait until next week. (4) Fed Chair Jerome Powell's performance last week was dovish enough that futures markets were pricing in a 74% chance of a rate cut in June, up from 55% a week ago. Powell will participate in a moderated discussion at a macroeconomic and monetary policy meeting on Friday. In addition, Fed Governors Lisa Cook and Christopher Waller will also speak this week. (5) Europe will face its own inflation test, with France, Italy, Belgium and Spain releasing consumer price data. The Eurozone headline CPI report is scheduled for April 3. (6) The Riksbank will meet on Wednesday and the Riksbank is widely expected to keep interest rates at 4.0%. However, the SNB unexpectedly cut interest rates last week, leading the market to expect a dovish statement from the Riksbank. (7) The expectation of lower global borrowing costs is positive for equities, with the S&P 500 up nearly 10% year-to-date. S&P 500 futures edged down 0.1%, while Nasdaq futures were little changed on Monday. Euro Stoxx 50 futures rose 0.1%, while Britain's FTSE futures were nearly flat. The MSCI Asia Pacific ex-Japan index was flat, just below an eight-month high. Japan's Nikkei 225 fell 0.6%, surging 5.6% and hitting a new high last week as the yen weakened. (8) The Fed's tone last week was dovish, but it was not the only one, as the SNB has actually started cutting interest rates, while the Bank of England and the European Central Bank have given the market hopes that easing will start in June. (9) Jonas Goltermann, deputy chief market economist at Capital Economics, said, "In our view, the rally in the US dollar reflects a more clearly dovish stance from other major central banks – notably the Swiss National Bank and the Bank of England"