Written by Jamie McGeever
(Reuters) – Future outlook for the Asian market.
Asian markets on Monday start a week packed with top local economic data and policy decisions in an optimistic mood after a surprising new U.S. job growth report sparked a surge on Wall Street on Friday. That’s what I’m aiming for.
Highlights of Monday’s Asian calendar include Japan’s trade and current account balance, Malaysia’s industrial production and the Philippines’ interest rate decision.
Japan’s Nikkei Stock Average will aim to rebound from Friday’s 2% drop. The weekly decline was 3.4%, the biggest decline since December 2022. As before, exchange rates and the threat of Tokyo’s intervention to support the yen will have a big impact. Regarding Japanese stocks.
The rebound in risk appetite in U.S. trading on Friday was notable because it occurred despite a sharp rise in bond yields, a 4% weekly rise in oil prices to just under $92 a barrel, and a further setback in expectations for U.S. interest rate cuts.
Geopolitical tensions also continue to resolve, with gold prices rising to a record high of $2,330 an ounce on Friday.
Will Wall Street’s positive sentiment extend to Asia on Monday, or will markets feel pressured? This sign indicates that the stock price is in a period of consolidation at a high price, rather than a move to take profits at a high price.
The S&P 500 and MSCI World Index posted their biggest weekly losses in three months as bond yields rose, but they fell less than 0.8%. The MSCI Asia index (excluding Japan), which is sensitive to rising US yields, was even more resilient, ending the week essentially flat.
Much of that resilience is due to improving economic data in China, with the government releasing a roundup of key indicators this week including lending, trade and inflation.
US Treasury Secretary Janet Yellen has concluded a four-day visit to China. Yellen said she agreed to begin exchanges with Chinese Vice Premier He Lifeng on “balanced” economic growth to address U.S. concerns about China’s overcapacity. .
He also told Premier Li Qiang that bilateral relations are more stable because the two countries can have “tough” discussions.
Meanwhile, the Philippine central bank is widely expected to keep its key policy rate unchanged at 6.50% at its fourth meeting on Monday. Inflation accelerated for the first time in five months, rising to 3.4% in February, but the central bank warned there was a risk that the outlook remained upside.
This suggests that the Bangko Sentral ng Pilipinas (BSP) may be less inclined to lower interest rates ahead of its major peers, especially the Fed. Seven out of 19 economists polled by Reuters forecast a 25 basis point cut to 6.25% in May or June.
Here are the key trends that could give further direction to the market on Monday:
– Philippine Central Bank Policy Council
– Japan’s trade and current account balance (February)
– Malaysian Industrial Production (February)
(Writing by Jamie McGeever; Editing by Bill Berkrot)
