by Jamie McGeever
(Reuters) – A look at the day ahead in Asian markets from financial markets columnist Jamie McGeever.
As the week progresses, asset markets across Asia will once again be dominated by key economic indicators, market and growth-supporting policy moves and diplomatic signals from China.
Asian markets will also get their first chance on Monday to react to Jackson Hole speeches by the world’s most powerful global policymakers Jerome Powell, Christine Lagarde and Kazuo Ueda last Friday, although trading was normal as UK markets were closed for a holiday. Will be lighter than ,
Looking to the Asian economic calendar this week, Purchasing Managers’ Index reports for several countries, including China, will provide the first glimpse of how activity played out in August. GDP data from India and inflation data from Indonesia and Vietnam are also available.
The biggest market-mover of all of these will probably be China’s services and manufacturing PMI at the end of the week. Investors – and policymakers – will be desperate for signs that the economy is picking up, but the forecast is for another month of weakness.
Data this weekend showed profits at China’s industrial companies plunged 6.7% in July from a year earlier, extending this year’s decline to a seventh straight month and year-on-year compared to the same period last year. -Year earnings declined 15.5%.
In their latest attempt to clean up the mess, Chinese authorities this weekend halved the stamp duty on stock trading. The move, effective Monday, will cut fees on stock trades to 0.1% “to strengthen capital markets and enhance investor confidence”.
According to the China Securities Regulatory Commission, stock exchanges have also reduced their margin funding requirements.
This came as US Commerce Secretary Gina Raimondo arrived in Beijing on Sunday for a four-day visit aimed at boosting trade ties between the world’s two largest economies. Relations between the two superpowers are in a very bad shape.
Asian shares started the week slightly better than in recent weeks, but not by much. The MSCI Asia ex-Japan index snapped a three-week losing streak, but the only 0.2% gain was the smallest since November, an even more drastic jump after a cumulative 10% decline over the past three weeks.
Asian market conditions are strong and clear – financial conditions are increasingly tightening, largely due to a steady rise in US Treasury yields.
Global, emerging market and Chinese financial conditions fell to their lowest levels this year last week, according to Goldman Sachs’ Financial Conditions Index.
Higher US yields and a stronger dollar may be justified from a fundamental perspective, but the dollar has appreciated for six consecutive weeks and two-year US yields have risen 13 of the last 16 weeks.
period of stay?
Here are the key developments that could provide more direction to the market on Monday:
– Australia Retail Sales (July)
– Michael Barr of the US Fed speaks
– Euro Zone Money Supply (July)
(By Jamie McGeever; Editing by Diane Craft)
