Asian stocks gain, dollar falls with economic data in focus

The dollar dropped for a fourth day, weakening against most of its Group-of-10 peers. Treasury yields edged lower in early Asian trading after those on 10-year notes fell eight basis points Monday, the biggest one-day decline since March.

The CBOE VIX index of equity volatility remained near the 17-month low reached last week. JPMorgan Chase & Co. strategist Marko Kolanovic said that may spell trouble for stock investors as it gives a false sense of calm.

Investors trimmed bets on US interest-rate hikes, according to futures. Market pricing now indicates rates will sit below 4.5 percent by year-end after peaking in June.

“The Fed is going to continue to feel they can be restrictive as long as the economy continues to be this robust,” Shana Sissel, president and CEO of Banrion Capital Management, said on Bloomberg Television. “A lot of hedge funds are positioning because they think rates are going to increase. I’m in that same camp.”

The small shifts in Fed pricing underscore the lack of direction at the start of a busy week for economic data and corporate earnings. US manufacturing data was weaker than economists forecast and uncertainty over the debt ceiling persisted. Later this week, US GDP data is forecast to reveal slower growth, and the so-called core PCE deflator, the Fed’s preferred inflation gauge, is expected to show price growth cooled.

The South Korean economy grew more than forecast in the first quarter, according to data released Tuesday, giving the central bank breathing room to assesses the impact of policies on growth and inflation.

First Republic Bank plans to cut as much as a quarter of its workforce and shrink its balance sheet after deposits fell more than expected. UBS Group AG shares climbed after takeover target Credit Suisse AG reported outflows that were lower than some analysts predicted. Microsoft Corp., Meta Platforms Inc. and Amazon.com Inc report later this week.

In commodities, oil was little changed and gold rose.