A man wearing a protective mask walks past an electronic board displaying stock market data outside a brokerage firm in Tokyo, Japan, amid the outbreak of the coronavirus disease (COVID-19), amid the outbreak of the coronavirus disease (COVID-19). Portal/Kim Kyung-Hoon/File Photo
Aug 15 (Portal) – A look at the day ahead in Asian markets by Jamie McGeever
Economic data from Asia’s two economic powerhouses opens the global trading day on Monday – a set of July indicators from failed China and Japan’s Q2 GDP report.
We get the first glimpse of how China’s COVID-hit economy has started into the third quarter with July readings for industrial production, retail sales, house prices and urban investment. Economists are generally looking for a recovery, albeit gradually.
Chinese stocks endured a five-week losing streak on Friday, ending the week up 0.8% (.CSI300), helped by feel-good factor on Wall Street and an easing of Sino-US tensions over Taiwan.
Also on Friday, however, five US-listed Chinese state-owned companies whose audits are reviewed by the US Securities and Exchange Commission said they would voluntarily delist from the New York Stock Exchange. Continue reading
Meanwhile, Japan’s economy is expected to have rebounded strongly in the second quarter after contracting in the first, with economists forecasting quarterly growth of 0.6% and annualized expansion of 2.5%.
The Japanese yen is up about 1% against the dollar last week – its third weekly gain in four weeks. Could it convincingly break the 130-per-dollar barrier this week?
The tone across Asia on Monday will also be set by growing hopes that US inflation has peaked. This could further fuel the rally in risky assets, steepening the US yield curve and weighing on the dollar.
Later Monday, the US Treasury will release its June “TIC” data, which will measure inflows and outflows of US Treasury securities. Given the recent political tensions, China’s demand is being closely monitored.
Key developments that should give markets more direction on Monday:
Japan Q2 GDP estimate
China Industrial Production, Retail Sales, House Prices, Urban Investment Data (July)
New York Fed Manufacturing Index (August)
The Fed’s Christopher Waller speaks about banking and finance
Reporting by Jamie McGeever in Orlando, Florida. Editing by Matthew Lewis and Lisa Shumaker
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