Asian markets face challenging task ahead
A Look Ahead: Asian Markets Brace for Volatility
Goodbye, July.
Get ready for a rollercoaster ride in Asian markets this week. After enjoying robust gains last week, fueled by potential stimulus in China, Japan’s record-breaking minimum wage hike, and a glimmer of hope for the global economy, stocks in the region may face a bumpy start.
Chinese stocks will have to surpass last week’s impressive 4.5% gain in the CSI 300, the index’s largest weekly jump since November. Meanwhile, the Hang Seng and the Nikkei 225 saw gains of 4.4% and 1.4% respectively, and MSCI’s index of Asia Pacific shares outside of Japan rose by 2.5%.
The markets were shaken towards the end of the week when the Bank of Japan made its first move away from its long-standing monetary stimulus policy. This decision, coupled with Japan’s historic minimum wage hike, aimed to revive the world’s third-largest economy.
Investors are also closely watching China for signs of economic recovery. Beijing recently pledged to adjust its policies to jump-start the nation’s post-COVID recovery, resulting in a surge in the yuan and significant gains in the CSI 300 and the Hang Seng.
In the United States, the second-quarter earnings season is in full swing. This week, high-profile results from companies like Apple Inc, Amazon.com, Caterpillar Inc, and Starbucks Corp will provide insights into global demand, particularly in relation to China. Earnings from Marriott International, MGM Resorts International, and Host Hotels & Resorts will shed light on the state of the travel and tourism industry.
Key indicators to watch in the US next week include manufacturing and services PMI, job openings, private payrolls, jobless claims, and planned layoffs. These will set the stage for the highly anticipated July employment report on Friday.
Here are some key developments to keep an eye on:
Monday:
- China’s Caixin manufacturing PMI expected
- Japan to unveil consumer confidence, housing starts, and unemployment data for June
- Australia due to release July manufacturing PMI and June building approvals
- South Korea on deck with July import/export growth report
(Reporting by Stephen Culp; editing by Diane Craft)
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