Australia

Australian shares are leaning higher this morning after an optimistic session on Wall Street. Following lower producer prices in March, an end to the Federal Reserve’s aggressive monetary policy campaign appeared on the horizon.

ASX futures had risen 18 points or 0.2% as of 6:00am on Friday, suggesting a positive open.

US stocks rose Thursday after data showed producer prices unexpectedly fell in March, adding to optimism that inflation is easing.

The S&P 500 gained 1.3%, while the Dow Jones Industrial Average rose 1.1% and the tech-heavy Nasdaq Composite advanced 2%.

Of the 11 sectors in the S&P 500, 10 were in the green, with consumer discretionary and information technology leading gains. Only the real estate sector declined.

Data out Thursday showed that the producer-price index, which reflects supply conditions across the economy, fell 0.5% in March from February. Economists polled by The Wall Street Journal had expected the gauge to remain flat. That came a day after March's consumer-price index showed inflation easing but remaining well above pre-pandemic levels.

In commodity markets, Brent crude oil lost 1.3% to $US86.20 a barrel while gold added 1.2% to US$2,038.28.

Australian government bonds edged higher, with the 2 Year yield up to 2.95% and the 10 Year yield climbing to 3.27%. US Treasury notes were lower, with the 2 Year yield slipping to 3.97% and the 10 Year yield down to 3.45%.

The Australian dollar rose to 67.88 US cents after previously closing at 66.92. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, edged down to 95.14.

Asia

Chinese shares ended lower, extending their early losses despite the release of stronger-than-expected March exports data, which bolstered the outlook for the country's manufacturing sector. The market's lackluster reaction was partially due to investors' concerns about the sustainability of export growth. "Festival-related demand in Southeast Asia is likely to dissipate in coming months; and U.S. and European markets are expected to see sequential weakness in growth momentum in 2H," economists from Barclays said in a note. Chip makers and software companies weighed on the market with Tongwei Co. down 0.4% and Luxshare Precision Industry dropping 4.7%. The Shanghai Composite Index declined 0.3% to close at 3318.36. The Shenzhen Composite Index ended 0.9% lower and the ChiNext Price Index declined 1.0%.

Hong Kong's benchmark Hang Seng Index closed up 0.2% at 20344.48, bouncing back from early losses as the mood was lifted by upbeat data from China. Trade and lending activity for March both beat expectations, buoying sentiment, though concerns remain about the sustainability of the country's recovery. A wide variety of companies led the recovery, with HSBC Holdings and Alibaba Health both reversing from losses to end higher. Property shares had a mixed day, with Sunac China slumping 55% as it resumed trading after a more than year-long suspension, while Longfor Group rose 2.5%. Consumer and tech stocks added to the losses, with restaurant chain Haidilao dropping 1.0% and e-commerce giant JD.com down 2.1%. The Hang Seng Tech index lost 0.2%.

Japan's Nikkei Stock Average reversed earlier losses to close 0.3% higher at 28156.97, buoyed by gains in consumer and drug-related shares. Supermarket and shopping center operator Aeon Co. rose 2.7%, specialty pharmaceutical company Kyowa Kirin added 2.5% and Uniqlo-brand owner Fast Retailing was 2.1% higher.

India's Sensex index closed 0.1% higher at 60431.00 amid gains in financial stocks. Investor sentiment could remain cautious after minutes from the Federal Reserve's March meeting indicated that inflation is still above the central bank's comfort level, hinting at the possibility of another rate increase, said ICICI Direct analysts in a note. Among financial stocks, IndusInd Bank rose 3.15%, Axis Bank added 1.6% and Bajaj Finserv closed 1.5% higher. Other gainers included Power Grid Corp. of India, up 1.7%.

Europe

European stocks gained Thursday following a mixed session in Asia. The pan-European Stoxx Europe 600 gained 0.4%, the French CAC 40 advanced 1.1% and the German DAX added 0.2%. Home-construction stocks were among the biggest risers in London after HSBC upgraded several sector players to buy, according to IG analysts.

The United Kingdom’s FTSE 100 index closed Thursday up 0.2%, marking its seventh consecutive day in positive territory. Investors were optimistic that weaker inflation figures in the U.S., together with a rise in jobless claims, may bring the Federal Reserve's rate-hiking cycle closer to an end.

"The market is once again back to hoping that more bad news will tilt the Fed further towards a pause beyond the next meeting," IG Group chief market analyst Chris Beauchamp said in a note. Miner Antofagasta led the British index higher, with shares up 2.6%, followed by Burberry and Barratt Developments, up 2.5% and 2.4%, respectively. Hargreaves Lansdown was the top faller, with shares closing down 2%.

North America

US stocks rose Thursday after data showed producer prices unexpectedly fell in March, adding to optimism that inflation is easing.

The S&P 500 gained 1.3%, while the Dow Jones Industrial Average rose 1.1% and the tech-heavy Nasdaq Composite advanced 2%.

Of the 11 sectors in the S&P 500, 10 were in the green, with consumer discretionary and information technology leading gains. Only the real estate sector declined.

Data released Thursday showed that the producer-price index, which reflects supply conditions across the economy, fell 0.5% in March from February. Economists polled by The Wall Street Journal had expected the gauge to remain flat. That came a day after March's consumer-price index showed inflation easing but remaining well above pre-pandemic levels.

"We now have clear signs that inflation is decelerating as expected, so that's positive," said Nadège Dufossé, global head of multi-asset at Candriam. "But we also know that economic data will probably continue to weaken, and if we have a harder-than-expected recession in the US of course that's not integrated in the valuation of equity markets."

Many on Wall Street believe that easing price pressures will propel the Federal Reserve to pare back from its aggressive rate-hiking campaign. Investors are wagering that the Fed will not raise rates after May, if officials raise them at all.

"We wouldn't be surprised at 25 basis points, but again, the big picture is that we're closer to the end. There's not much beyond that," Stephen Lee, founding principal at Logan Capital Management, said about the Fed meeting in May. He's planning to add to growthier stock names in the consumer discretionary and industrial tech areas.

The next catalyst for markets could be earnings season, which is getting under way, with Wall Street banks including JPMorgan and Citigroup due to report Friday.

In stocks, Delta Air Lines shares fell 1.1% after the airline posted a loss but said that strong summer bookings should boost profits in coming months. Shares in United Airlines rose, while American Airlines slipped.

Japan's SoftBank has moved to sell most of its remaining stake in the Chinese e-commerce group Alibaba via prepaid forward contracts, the Financial Times reported. Alibaba's American depositary receipts gained 2.5%, after losing nearly 6% in the previous session.

After Harley-Davidson's chief financial officer, Gina Goetter, announced that she is leaving to become CFO at Hasbro, the motorcycle manufacturer's stock slipped 1.7%.

The Dow Jones' most heavily-weighted company, UnitedHealth Group, is scheduled to release quarterly results Friday morning.