The Morning Show: Calm Before the Storm

Jan. 30 (Reuters) – A look at the day ahead in Asian markets from Jamie MacGyver.

It appears to be a quiet start to the week in Asia on Monday, but don’t be fooled – it could be the calm before the storm.

A slew of regional economic indicators including Japanese unemployment and PMIs from China, Australia and India, as well as US non-farm payrolls and interest rate decisions in the US, Eurozone and UK will certainly provide fireworks later in the week.

In light of this, on Monday investors may choose to reduce exposure to a glut of event risk, especially towards the end of the month and given how much stocks have risen since the turn of the year.

The MSCI Asia ex-Japan Index reached a nine-month high and is up more than 30% from its October low. It has risen in 11 of the past 13 weeks and is on track for a monthly gain of 11%.

global markets in 2023

This is comfortably beating the S&P 500, Eurozone and UK stocks, Japan’s Nikkei 225 and MSCI World, so there may be a bit of profit-taking.

in India, Gautam Adani He faces a critical day on Monday, with the $2.5 billion sale of his main company’s shares overshadowed by the second day of the auction, which was overshadowed by the $48 billion in shares of the Indian billionaire due to the short seller’s report in the US.

Reopening of China After the Lunar New Year holidays, trading volumes in Asia will return to more or less normal. In time for a potentially intermittent 24-hour period during Wednesday and Thursday when it is Federal ReserveAnd European Central Bank And Bank of England They announce their latest political decisions.

The debate about a US recession or soft landing, and the Fed’s “pivot” or “higher for longer” may gain more clarity after Fed Chairman Jerome Powell’s press conference on Wednesday. At the moment, investors’ glasses are half full.

Global stocks have added $4 trillion since the beginning of the year

Wall Street’s “fear index” – the VIX volatility index – fell Friday below 18.0 for the first time in more than a year, and perhaps slightly under the radar, US bond market volatility is now at its lowest since last June.

On the Asian data front this week, Chinese PMIs will provide the latest snapshot of how the region’s largest economy is emerging from zero COVID restrictions, while Japanese unemployment and retail sales figures will be released on Tuesday.

There’s a flood of Japanese earnings reports this week, from corporate behemoths including SoftBank, Sony and Sumitomo and financial institutions Mizuho, ​​Daiwa and Mitsubishi UFJ.

Three key developments could provide more direction to the markets on Monday:

– New Zealand Trade (December)

German GDP (4th quarter)

– Eurozone sentiment indicators (January)

(Reporting by Jamie MacGyver in Orlando, Florida); Editing by Lisa Shumaker

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The opinions expressed are those of the author. They do not reflect the opinions of Reuters News, which is bound by the trust principles of integrity, independence, and freedom from bias.

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Jimmy MacGyver has been a financial journalist since 1998, reporting from Brazil, Spain, New York and London, and now back in the US again. Focus on the economy, central banks, policy makers and global markets – especially foreign exchange and fixed income. Follow me on Twitter: @ReutersJamie

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