Three central bank policy announcements dominate the Asian economic calendar this week as investors grapple with the market effects of the greatest decline in interest rate expectations.
This follows rising global tensions. Friday marks the one-year anniversary of Russia’s invasion of Ukraine, and the spy balloon crisis is harming China-US relations.
Since Monday is President’s Day in the United States, trading activity and volume in Asia will be lower than normal.
And this will provide a unique opportunity for traders to reflect on the quick increase in US interest rates and market-based yields.
The S&P 500 and MSCI World ended the week down only 0.3 percent, while the Nasdaq rose 0.6 percent. Wall Street and global markets in general were performing quite well. Asia feels hotter. The MSCI Asia Index excluding Japan declined for three consecutive weeks, its worst losing run since October.
Chinese equities plummeted for three weeks, with last week’s decline worsened by Friday’s 1.5% decline. Making it the worst of the year, after Lenovo’s announcement of its largest sales decline in 14 years.
The people’s Bank of China is ready to establish its base rate on Monday. Several experts anticipate that he will maintain the benchmark lending rate for the sixth consecutive month. This means maintaining the one-year prime lending rate at 3.65% and the five-year rate at 4.3%.
The Reserve Bank of New Zealand is set to reduce its tightening on Wednesday. It will also lift interest rates by 0.5 percentage points to 4.75 percent.
The Bank of Korea is set to keep its benchmark interest rate at 3.5%, the first time since April.
Inflation is rising, the US political landscape has changed, and the currency has plummeted 7% in two weeks.
This week’s market-moving Asian economic data includes Japan’s January consumer price inflation on Friday (anticipating a 41-year high of four percent) and Hong Kong and Taiwan’s fourth quarter GDP estimates on Wednesday.
However, on the commercial side, the issues surrounding India’s Adani Group are growing political. On Friday, reports has it that the Indian government has asked the country’s highest court to evaluate the “authenticity” of the claims against Hindenburg Research.
Comment Template