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Marketmind: A pessimistic economic signal

By Jamie McGeever

(Reuters) – Jamie McGeever looks ahead to the day ahead for Asian markets.

GDP data from South Korea and the Philippines were on the list of Asian data for investors on Thursday, with the optimism that has driven global stocks and risk assets higher this year showing signs of fading.

Some gloomy signals from the latest US earnings reports, a string of tech job cuts and concerns about global growth overshadowed expectations that the Fed and other central banks will stop the monetary tightening pedal hope.

The Bank of Canada was the latest to signal a pause in rate hikes, saying on Wednesday it may pause further rate hikes after raising its key rate to 4.5%. Some Asian central banks have done the same in recent weeks.

Of course, for many central banks, the tightening cycle may be coming to an end, as the lagged effects of previous rate hikes have not yet fully felt and policymakers expect slower growth.

Investors will get an update on the health of two Asian economies – the Philippines and South Korea – on Thursday, before world markets pick up on U.S. growth in the October-December period preliminary estimate of . sky.

South Korea’s economy is expected to shrink by 0.3% in the fourth quarter of last year, the first quarterly contraction since the outbreak of COVID-30 at the beginning of the year2020.

South Korea’s fate is closely tied to the global tech industry and its largest trading partner, China. Both navigate rough waters.

Asian stock markets are still soaring. MSCI’s broadest index of Asia-Pacific shares outside Japan hit a seven-month high on Wednesday. Notably, the index is up 13% from its October low hit three months ago and has moved up from the last 13 week .

A correction could be in the offing, and if it materializes on Thursday, volumes would exceed three-day gains this week as some Asian markets reopen after the Lunar New Year holiday.

However, China remains closed.

Three key developments that could provide more direction for markets on Thursday:

– Korea GDP (Q4)

– Philippines GDP (Q4)

– US GDP (Q4 Estimate)

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