By Jamie McGeever
(Reuters) – A have a have a look at the day ahead in Asian markets.
Asian markets on Monday aim to kick off per week jam-packed with top-tier local economic indicators and policy decisions in optimistic mood, after one other set of forecast-busting U.S. job growth figures sparked a sharp rise on Wall Street on Friday.
The highlights on Monday’s Asian calendar are trade and current account figures from Japan, industrial production from Malaysia, and an rate of interest decision throughout the Philippines.
Japan’s Nikkei 225 could be searching for to bounce back from Friday’s 2% slide, which sealed a weekly lack of three.4%, its biggest decline since December 2022. As ever, the exchange rate and threat of yen-supportive intervention from Tokyo will hold great sway over Japanese stocks.
The rebound in risk appetite in U.S. trading on Friday was noteworthy since it came despite a spike in bond yields, a 4% weekly rise in oil prices to just under $92 a barrel, and an extra erosion of U.S. rate cut expectations.
Geopolitical tensions proceed to bubble away too, pushing gold to a record high of $2,330 an oz on Friday.
Will Wall Street’s feel good factor extend into Asia on Monday, or will markets feel the squeeze? The signs point to equities in a period of consolidation on the highs barely than a profit-taking run for the hills.
The S&P 500 and MSCI World indexes registered their biggest weekly losses in three months throughout the face of rising bond yields, but they were lower than 0.8%. The MSCI Asia ex-Japan index, which is sensitive to higher U.S. yields, was way more resilient, principally ending the week flat.
Much of that resilience is all the best way all the way down to improving economic numbers from China, and Beijing releases a batch of key indicators this week including lending, trade and inflation.
U.S. Treasury Secretary Janet Yellen has just completed a four-day visit to China. Yellen said that she and Chinese Vice Premier He Lifeng agreed to launch exchanges on “balanced” economic growth, an effort to cope with U.S. concerns about China’s excess manufacturing capability.
She also told Premier Li Qiang that bilateral relations were now more stable because the two sides can have “tough” discussions.
The Philippine central bank, meanwhile, is widely expected to take care of its key policy rate on hold at 6.50% for a fourth meeting on Monday. Inflation picked up for the first time in five months in February, rising to 3.4%, and the central bank cautioned risks to the outlook remained toward the upside.
That means the Bangko Sentral ng Pilipinas (BSP) may be less inclined to reduce its rate ahead of major peers, notably the Fed. Seven out of 19 economists in a Reuters poll predict a 25 basis points cut to 6.25% either in May or June.
Listed below are key developments that may provide more direction to markets on Monday:
– Philippines central bank policy meeting
– Japan trade, current account (February)
– Malaysia industrial production (February)
(By Jamie McGeever; Editing by Bill Berkrot)