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Marketmind: China lays out economic, political and military vision

By Jamie McGeever

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

Asian markets are likely to open higher on Monday following Wall Street’s surge on Friday, but a slew of Chinese economic data and comments from Federal Reserve Chairman Jerome Powell later in the week could be swift. change market sentiment.

Monetary policy decisions in Australia and Japan on Wednesday and Friday, respectively, will also be market-moving events. Before that happens, however, investors will need to digest a slew of headlines from China this weekend. Committee – Outlines Beijing’s overall goals and plans for the coming year.

On the economic front, the government said that the growth target for this year is around 5%, which is lower than last year’s target of 5.5%. China is self-reliant in technology and the central bank will provide “strong” support for economic development.

Perhaps most notably, Beijing said it would increase defense spending by 7.2% – higher than last year’s growth rate and ahead of expected GDP growth – as Premier Li Keqiang called on the military to be more prepared.

(Graph: MSCI Asia ex-Japan – Weekly Change – https://inew.news/wp-content/uploads/2023/03/localimages/ChinaCPI.png)

Beijing’s vision for the 12 months ahead was outlined this weekend as investors learned more about the progress of China’s economic reopening The macro, military and geopolitical outlook for February follows this week’s release of trade, inflation and credit and lending data.

Inflation data from South Korea, the Philippines, Thailand and Taiwan will be closely watched by investors and policymakers this week. With the Federal Reserve looking poised to tighten policy further, renewed dollar appreciation could add to currency-induced inflationary pressures in Asia.

Attention will turn to Japan later in the week, with fourth quarter GDP data on Thursday and Bank of Japan policy decision on Friday, last time with Haruhiko Kuroda as governor.

(Chart: MSCI Asia ex-Japan – weekly change – https://inew.news/wp-content/uploads/2023/03/localimages/MSCIASIA.png)

Asian stocks have broadly lagged U.S. and global equities in recent weeks, but underlying questions remain: Facing soaring U.S. bond yields, interest rates and inflation expectations?

Global bond yields are also sharply higher. Something may be about to happen.

Here are three key developments that could provide more direction for markets on Monday:

– National People’s Congress of China

-Korea Inflation (February)

-Eurozone Retail Sales (January)

(Author : Jamie McGeever; Editing: Diane Craft)

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