(Bloomberg) — Asian equities rallied into the end of the half-year as investors awaited the Federal Reserve’s preferred inflation gauge due Friday.

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A gauge of regional equities climbed as much as 0.6% with Japanese, South Korean and Chinese shares among the top gainers. Japan’s stock benchmark Topix index was on course for its highest close in 34 years. Contracts for US equities rose.

President Joe Biden and former President Donald Trump faced off in their first 2024 debate late Thursday in the US. The dollar and Bitcoin rose as the debate got going, and the yen weakened past 161 to the greenback, its lowest levels since 1986 — though they all pared or erased the moves through the course of the debate.

While markets think Trump is winning, “it’s still early to make the conclusion,” said Carol Kong, a strategist at Commonwealth Bank of Australia in Sydney. “The PCE report will be the bigger market mover that can add to the US dollar gains if we are right about a stronger core PCE.”

Equity investors are bracing for an eventful second half of 2024. The MSCI’s all-country stock index has rallied 11% year-to-date, on track for the fourth-best first-half performance for the last 20 years. Meanwhile, Bloomberg’s dollar index has gained 5% since the end of 2023, while oil has risen 15% and Bitcoin has advanced 45%.

Treasuries retreated in Asian trading, paring gains from the prior session, when lackluster US economic data reinforced speculation the Fed will cut interest rates this year to prevent a bigger slowdown in the economy.

The US government marked down personal spending to an annualized 1.5% in the first quarter. Separate releases showed declines in orders and shipments of certain business equipment, weakness in the job market and a slide in homebuying.

“We expect both consumer and business activity to slow in the latter half of 2024, giving the Fed ample opportunity to begin cutting rates later this year,” said Jeff Roach, chief economist at LPL Financial.

US PREVIEW: May PCE Inflation to Offer Welcome News for Fed

Meanwhile, India is set to lure billions of dollars more inflows when JPMorgan Chase & Co. adds the nation’s government bonds to its emerging markets index on Friday, opening up a $1.3 trillion market to a broader range of investors.

Story continues

One Rate Cut

Fed Bank of Atlanta President Raphael Bostic said he continues to expect one rate reduction this year amid signs inflation has resumed its decline. His projection echoes that of the Federal Open Market Committee. Swaps markets are pricing in about 45 basis points of easing in 2024, which would equate to less than two cuts.

Economists expect data Friday to show that the Fed’s preferred gauge of underlying inflation slowed to an annualized rate 2.6% last month from 2.8%. While that’s the lowest reading since March 2021, it remains above the Fed’s goal for 2% inflation.

“A consensus move would conform with the narrative that the early-2024 reflationary pressures are fading, and the cooling trend seen during the second half of 2023 has once again resumed in the second quarter,” said Ian Lyngen and Vail Hartman at BMO Capital Markets. “Perhaps more importantly, investors are anticipating a round of inflation data that offers incremental support for a September rate cut.”

In Japan, the yen came off the day’s low after the Nikkei Shimbun reported that Atsushi Mimura is to be appointed as the new vice finance minister for international affairs, making him the face of official efforts to manage the yen as Masato Kanda steps down.

Elsewhere, the Mexican peso fell against the dollar before clawing back some ground. Traders will be parsing clues from the US presidential debate as well as comments from Banco de Mexico’s Governor Victoria Rodriguez that a decrease in volatility is one of the elements that has opened the door for the central bank to consider interest rate cuts.

In corporate news, Bharti Airtel Ltd. – India’s second-biggest phone carrier – planned to raise prices for mobile plans following a similar move by rival Reliance Industries Ltd.’s unit on Thursday.

Key events this week:

• US PCE inflation, spending and income, University of Michigan consumer sentiment, Friday

• Fed’s Thomas Barkin speaks, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.2% as of 2:17 p.m. Tokyo time

• Nasdaq 100 futures rose 0.4%

• Nikkei 225 futures (OSE) rose 0.3%

• Japan’s Topix rose 0.4%

• Australia’s S&P/ASX 200 rose 0.2%

• Hong Kong’s Hang Seng rose 0.4%

• The Shanghai Composite rose 1.1%

• Euro Stoxx 50 futures rose 0.3%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%

• The euro fell 0.1% to $1.0690

• The Japanese yen fell 0.1% to 160.98 per dollar

• The offshore yuan was little changed at 7.2971 per dollar

• The Australian dollar fell 0.3% to $0.6624

Cryptocurrencies

• Bitcoin rose 0.2% to $61,563.62

• Ether rose 0.2% to $3,446.64

Bonds

• The yield on 10-year Treasuries advanced two basis points to 4.31%

• Japan’s 10-year yield declined 1.5 basis points to 1.055%

• Australia’s 10-year yield declined eight basis points to 4.33%

Commodities

• West Texas Intermediate crude rose 0.6% to $82.20 a barrel

• Spot gold fell 0.2% to $2,322.48 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Matthew Burgess.

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