Hang Seng Tops 24K on Trade Optimism, Crypto Traders Eye U.S. Inflation Data
Asian equity markets kicked off the week on a positive note as Hong Kong’s Hang Seng Index rallied past 24,000 for the first time since March, buoyed by optimism surrounding renewed U.S.–China trade negotiations in London. However, the crypto market failed to mirror that enthusiasm, with major tokens showing muted performance ahead of Wednesday’s key U.S. CPI release.
Bitcoin Flat Despite Broader Risk-On Sentiment
Bitcoin (BTC) traded sideways near $105,650, offering little direction after forming a doji candle on Sunday—often seen as a marker of investor indecision. On-chain activity reflected the same caution, with Blockchain.com data showing the seven-day average of daily transactions dropping to 315,480, the lowest in over a year.
Meanwhile, XRP slipped over 1% to $2.24, despite breaking above a descending trendline from mid-May. With the APEX 2025 conference set to begin in Singapore, traders are bracing for potential volatility.
Dogecoin (DOGE) also trended lower, down nearly 2% to $0.161, as it failed to reclaim the 100-day simple moving average over the weekend. Momentum remains weak as it nears the $0.18 resistance level.
Asia Trades Higher as U.S.–China Talks Begin
The Hang Seng’s breakout came as top trade officials from the U.S. and China convened in London. President Donald Trump struck an upbeat tone ahead of the talks, stating, “The meeting should go very well,” via Truth Social. Analysts expect negotiations to last through the week, which could keep Asian markets on firm footing.
South Korea’s KOSPI and China’s Shanghai Composite also advanced, showing resilience despite troubling inflation data out of China.
China Faces Intensifying Deflation Pressures
According to new data from China’s National Bureau of Statistics:
- Consumer prices fell 0.1% YoY in May, the fourth straight month of negative inflation.
- Producer prices dropped 3.3% YoY, deeper than expected.
Brookings Institution economist Robin Brooks warned that U.S. tariffs are pushing China into “full-blown deflation,” with weak domestic demand and a high debt burden amplifying downside risks.
In response, China’s central bank is expected to take additional stimulus measures. The People’s Bank of China (PBOC) cut interest rates in May and may further lower the reserve requirement ratio later this year.
U.S. CPI: The Next Major Macro Catalyst
Investors are now focused on Wednesday’s release of the U.S. Consumer Price Index for May. Economists expect:
- Headline CPI: +0.2% MoM | +2.5% YoY
- Core CPI: +2.9% YoY, up from April’s 2.8%
Strategists at Barclays believe early signs of tariff-related price pressures could begin to show. A stronger-than-expected inflation print could dampen expectations for Fed rate cuts, creating downside risk across equities and crypto.
