Jan 16 (Reuters) – A look at the day ahead in Asian markets from Jamie MacGyver.
Fourth-quarter GDP growth tops the list of Chinese key indicators, while interest rate decisions in Indonesia and Malaysia will weigh on investors. But the biggest event this week will be the Bank of Japan’s monetary policy decision on Wednesday.
Trading volume in the region may be lighter than usual on Monday as US markets are closed for Martin Luther King Day. The real market action will come later in the week.
While the BOJ is expected to leave its central “yield curve control” targets of -0.10% for short-term interest rates and 0% for the 10-year bond yield, all eyes will be on whether policymakers will make further adjustments to the yield curve control. for: (YCC) groups following the December surprise changes.
The BOJ stunned markets last month by effectively raising the benchmark 10-year yield to 0.50% from 0.25%, and investors rallied for it, pushing it to 0.55% last week, forcing the BOJ add to the already huge amount of bonds. shopping.
The BOJ may also raise its inflation forecast on Wednesday ahead of December inflation data on Friday.
Ian recently broke up. The BOJ stunned markets again in October by intervening in the foreign exchange market, buying the yen for the first time since 1998. the three interventions combined helped lift the yen to a seven-month high of $127.50, well off the October lows. 151.00.
China’s yuan is also rising against the beleaguered dollar on growing optimism about the country’s reopening now that Beijing has abandoned its zero-covid-19 policy. The yuan hit 6.70 to the dollar on Friday, the strongest since early July.
Chinese house price data will be released on Monday, ahead of a flurry of releases the following day: Q4 GDP and December retail sales, industrial output and fixed investment. All are expected to be weaker than previous prints, but investors hope this is an economic nadir.
Bank Indonesia is expected to raise interest rates by another 25 basis points to 5.75% later in the week. Economists at Goldman Sachs believe inflation may have peaked in September but remains too high for policymakers’ liking, so they will hike twice more for a final rate of 6.25% by March.
Bank Negara Malaysia is expected to raise interest rates by a quarter point to 3.00% on Thursday. Goldman predicts two more 25bps hikes to peak at 3.50% in May, while the Morgan Stanley team believes this will be the last hike of the cycle.
Elsewhere, no less than 11 speeches by Fed officials are lined up this week, and a record number of world leaders, policymakers and top corporate executives will attend the World Economic Forum in Davos.
Three key developments that could provide more direction to markets on Monday.
– China house prices (December)
– Indonesia Trade (December)
– India Wholesale Price Inflation (December)
Reporting by Jamie McGever in Orlando, Florida. Edited by Diane Craft
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