Monday, June 5, 2023
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Bear in a Chinese store

(Reuters) – Jamie McGeever looks ahead to Asian markets

Dollar climbs to fresh 143 as evidenced by another drop on Wall Street record year highs, a sharp sell-off in UK government debt, tightening global markets and global investor confidence show little sign of abating.

This is likely to weigh on Asian markets, especially tech stocks, early Wednesday – the Nasdaq fell for the seventh straight session on Tuesday, the most since 2016 the longest losing streak since.

This is also the backdrop for investors to receive a batch of key Chinese economic indicators and second-quarter GDP data from Australia.

Beijing is expected to report a slowdown in imports and a rise in exports in August, leading to a narrowing of the trade surplus to 92 $700 million. The country’s foreign exchange reserves are also expected to fall to $3 this month. 079 Trillion dollars.

The health of China’s economy is worrying for Beijing — and, increasingly, the world. The yuan hit a two-year low against the dollar on Tuesday, close to 7. 00, the central bank said it would cut the foreign exchange reserves that financial institutions must hold in a bid to slow the yuan’s depreciation. latest measures.

Asian FX spotlight shines even more on the yen, which has fallen to new year lows 143.00 per dollar. USD/JPY is at its best as the USD/JPY yield spread widens and a pair 150 may appear.00 Test 1971 One year since the beginning of the era of free floating exchange rates.

Economists expect Australia’s economic growth to accelerate in the second quarter, falling 3% in the second quarter. Oil prices on Tuesday may help ease market sentiment. But not much.

Key developments Wednesday that should give the market more direction:

China trade, current account (August)

China FX Reserves (August)

Japan Foreign Exchange Reserves (August)

Australia GDP (Q2)



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