Economic news

Marketmind: Battling between US optimism, China pessimism

2024.02.04 17:28


© Reuters. FILE PHOTO: Bull statues are positioned in font of screens exhibiting the Hang Seng inventory index and inventory costs outdoors Exchange Square, in Hong Kong, China, August 18, 2023. REUTERS/Tyrone Siu/File Photo

By Jamie McGeever

(Reuters) – A have a look at the day forward in Asian markets.

A wave of financial information from the Asia & Pacific area hits native markets on Monday, as traders get their first likelihood to react to the scorching U.S. employment numbers from Friday and digest the newest deterioration in sentiment in direction of China.

Monday’s financial calendar consists of buying managers index figures from a number of nations together with China and Japan, Indonesian GDP, Thai inflation and Australian commerce.

If Asian markets take their cue from Wall Street, count on a burst larger. There was nothing within the January jobs report that implies the U.S. financial system’s momentum is fading. Quite the alternative.

With the tailwinds of bumper tech earnings additionally behind them, the roared to a brand new all-time excessive and the Nasdaq jumped to a contemporary two-year peak. Remarkably, that’s the S&P 500’s thirteenth weekly acquire out of the final 14.

Music to Asian bulls’ ears, proper? Yes, however there are grounds for warning – the greenback bounced again, U.S. bond yields are hovering, and concern over China’s financial system and markets is again on the forefront of traders’ minds.

China’s CSI 300 index of blue chip shares fell on Friday, bringing its losses for the week to 4.6%. That’s the largest weekly decline since October 2022, and comes because the index fell six months in a row for the primary time ever.

The IMF final week warned that China’s development might gradual to three.5% by 2028, and the United States added greater than a dozen Chinese firms to these it alleges are working with Beijing’s navy, as a part of a broader effort to maintain American know-how from aiding China.

Meanwhile, Republican presidential candidate Donald Trump has stated he would impose tariffs on China once more if he’s elected in November and so they might exceed 60%.

That stated, the poor worth motion, newsflow and sentiment are drawing some traders in. Bank of America and EPFR information present cumulative inflows into Chinese shares have hit a brand new report, and Goldman Sachs says hedge funds have been shopping for on the quickest tempo in 5 years.

Elsewhere on Monday, Indonesia releases fourth-quarter GDP figures. Investors count on year-on-year development of 5.0%, supported by resilient home consumption, however quarter-on-quarter development of simply 0.4%.

Figures from Bangkok are anticipated to point out annual headline inflation in Thailand stays caught slightly below 0.6%, and core costs once more shrinking by round 0.8%.

The authorities has raised strain on the Bank of Thailand to chop its coverage price, presently at a decade-high of two.50%, at its Feb. 7 assembly. But the central financial institution has pushed again, and governor Sethaput Suthiwartnarueput instructed Reuters final week that the present price was ‘broadly impartial’.

Here are key developments that might present extra route to markets on Monday:

– China Caixin providers PMI (January)

– Indonesia GDP (This autumn)

– Australia commerce (December)

(By Jamie McGeever; Editing by Diane Craft)

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