(Bloomberg) — Asian markets were expected to be mixed this week on Monday as focus shifts to a host of corporate earnings and economic indicators to determine the direction of central bank policy.
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U.S. stock futures rose slightly in early trading after the S&P 500 Index fell for a sixth day in a row on Friday, weighed down by tech stocks. The dollar largely stabilized as traders took some comfort that there was no further escalation by Iran following Israel’s retaliatory strikes. Australian and Hong Kong stock futures rose, while Japanese contracts were flat.
There is a sense of calm after last week’s slide in Asian stocks as traders were troubled by tensions in the Middle East and hawkish comments from Federal Reserve officials that signaled reluctance to cut interest rates anytime soon. became. U.S. growth and Fed-recommended inflation metrics are expected to be released this week, which will help determine when to cut interest rates. Investors will also have to digest a flood of U.S. bond auctions this week.
Win Hsin, global head of market strategy at Brown Brothers Harriman in New York, said the Fed is in a press blackout period, and “during this quiet period, markets often temper their expectations for the Fed.” Stated. “However, the Fed has been consistently sending hawkish messages in recent weeks, and markets would do well to remember that.”
Read more: Fed will reset the clock with cuts and questions if interest rates are high enough
Last week was the S&P 500’s worst week since March 2023, with its drawdown from its all-time high widening to more than 5%. After the index’s strongest start to the year since 2019, investors are increasingly skeptical about how far the market will rise in the short term, even given the continued strength in the economy. It has become.
More than half of the Magnificent Seven tech giants are scheduled to report earnings this week, leaving investors wondering whether they can live up to the high expectations for artificial intelligence. The profits of the seven largest growth companies in the S&P 500 (Apple, Microsoft, Alphabet, Amazon.com, NVIDIA, Meta Platforms, and Tesla) were It is expected to increase by 38%. According to Bloomberg Intelligence, the first quarter. Excluding these, the benchmark index’s remaining returns are expected to contract by 3.9%.
Meanwhile, conflicts continue to smolder in the Middle East and Ukraine. Ukrainian officials were delighted after the U.S. House of Representatives approved more than $60 billion in aid, with President Volodymyr Zelenskiy vowing the money would help the country regain the lead in the fight against Russian aggression.
Iran’s supreme leader on Sunday praised the country’s retaliatory strikes against Israel a week ago, while dismissing the country’s low success rate in hitting targets as a minor problem. Khamenei did not mention the subsequent Israeli attack early Friday.
According to RBC Capital Markets, Israel’s limited strikes against Iran and the Iranian leadership’s subdued response could provide an opportunity for the conflict between the long-term adversaries to wind down for some time.
Helima Croft, head of global commodity strategy at RBC, said: “Even if the worst-case scenario does not occur, this is far from an easy ceasefire and will be tested again as problems remain in the wider context of the Middle East. “Possible,” he wrote in a memo. To the client. “The last two weeks have shown that this war could suddenly escalate, that the opposing sides may not have a firm understanding of the lines the other has to cross, and that there is a risk that the dynamics of the war could slip into a fog. I showed you something.”
Elsewhere this week, announcements are expected on China’s prime loan rate and inflation rates in Australia and Malaysia. Bank Indonesia’s policy decision comes just as Caterpillar, a bellwether of global growth, is looking forward to earnings and the currency is under pressure.
This week’s main events:
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China loan prime rate Monday
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Eurozone consumer confidence, Monday
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Philippine and US militaries begin annual military exercises near Taiwan and the South China Sea on Monday
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ECB President Christine Lagarde speaks on Monday
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Eurozone S&P Global Manufacturing PMI, S&P Global Services PMI, Tuesday
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UK S&P Global, CIPS Manufacturing PMI, Tuesday
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Australian CPI, Wednesday
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Indonesia interest rate decision Wednesday
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IBM, Boeing, Metaplatform earnings Wednesday
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Malaysia CPI, Thursday
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South Korea GDP, Thursday
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Turkey interest rate decision Thursday
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US GDP, wholesale inventories, new unemployment claims, Thursday
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Microsoft, Alphabet, Airbus, Caterpillar earnings results Thursday
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Japanese interest rate decision, Tokyo CPI, inflation and GDP forecast, Friday
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US Personal Income and Expenditures, University of Michigan Consumer Sentiment, Friday
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ExxonMobil, Chevron earnings, Friday
stock
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Hang Seng futures were up 0.5% as of 7:19 a.m. Tokyo time.
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S&P/ASX 200 futures rose 0.4%
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S&P 500 futures rose 0.2%
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Nasdaq 100 futures rose 0.3%
currency
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The euro was almost unchanged at $1.0658.
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The Japanese yen remained almost unchanged at 154.54 yen to the dollar.
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The offshore yuan was little changed at 7.2508 yuan to the dollar.
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The Australian dollar was unchanged at US$0.6418.
cryptocurrency
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Bitcoin rose 0.2% to $64,758.48
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Ether rose 0.2% to $3,156.67
bond
merchandise
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Spot gold fell 0.3% to $2,385.93 an ounce.
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West Texas Intermediate crude rose 0.1% to $83.26 per barrel.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Michael G. Wilson and Richard Henderson.
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