Economic data from Asia’s two economic engines kick off Monday’s global stock market day – a batch of July indicators from China faltering, and Japan’s GDP report for the second quarter.
We’ll get a first look at how China’s COVID-hit economy started the third quarter, with July readings of industrial production, retail sales, house prices and urban investment. . Economists generally expect a recovery, albeit gradual.
Chinese stocks ended a five-week streak of losses on Friday to end the week up 0.8%, buoyed by stock market sentiment and easing US-China tensions over Taiwan.
However, also on Friday, five U.S.-listed Chinese state-owned companies whose audits are under scrutiny by the U.S. securities regulator said they would voluntarily delist. from New York.
Meanwhile, the Japanese 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 an annualized expansion of 2.5%.
The Japanese yen rose about 1% against the dollar last week – its third weekly rise in four. Could he convincingly breach 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 risk assets, steepen the US yield curve and weigh on the dollar.
Later on Monday, the US Treasury releases its “TIC” data for the month of June, which measures the inflow and outflow of US sovereign debt. in light of recent political tensions, demand from China will be closely watched.
Key developments that should give markets more direction on Monday:
Estimated 2nd quarter GDP in Japan
Data on industrial production, retail sales, housing prices and urban investment in China (July)
New York Fed Manufacturing Index (August)
The Fed’s Christopher Waller speaks on banking and finance