Asian stocks decline, awaiting more economic data and cues. Awaiting central banks’ comments to find a direction and likelihood

Stock Indices, Fx, Crude oil, and Gold Rundown

Asian stock markets down on economic uncertain traction

Markets positioned themselves for an array of central bank meetings and economic reports expected over the next two weeks. Attention also turned to the U.S. earnings season. The majority of Asian stock indices  traded in a thin-to-low band on Monday.

This past week, regional markets suffered major declines as a series of weaker-than-anticipated profits from significant U.S. companies. Fueled worries about a slowdown in economic activity in the face of higher interest rates. As more officials asked for additional rate rises to combat inflation, bullish signals from the Fed also had an impact.

In the Asian session, saw Nikkei 225 up, and Kopsi, Hang Seng, and Chinese indexes fell

In anticipation of further inflation indicators anticipated this week, Japan’s Nikkei 225 index moved up on Monday. Consumer prices continued to be persistently high through March. According to statistics reported this past week, presumably continues to be a drag on the economy.

However, Friday’s BoJ meeting—the institution’s first under newcomer Governor Kazuo Ueda—will be the major topic of discussion. The BOJ is anticipated to continue its mega-dovish posture, but given that inflation is still firm t may provide hints about intentions to tighten later this year.

Prior to the release of Q1 GDP data on Tuesday, which is anticipated to reveal that growth probably slowed under persistent pressures. South Korea’s KOSPI slumped by 0.8%. Due to the obvious economic downturn, the Bank of Korea has decided to stop raising interest rates.

Shanghai Composite and Shanghai Shenzhen CSI 300 indices in China decreased by 0.6% and 0.4%, respectively. While the Hang Seng in Hong Kong decreased by 0.6%. The scale of a rebound this year has also been cast into doubt by China’s conflicting economic indicators. As the nation’s industrial sector is continuing to suffer.

In Australia, the ASX 200 was unchanged ahead of this week’s inflation report and the Reserve Bank meeting the following week.

Synopsis

Wider Asian markets stayed neutral to low, with cautious settling in advance of this week’s important U.S. data figures. Figures for the first Q1 GDP are set to be released on Thursday. It is anticipated that growth fell more from the previous quarter. And the PCE price index, the Fed’s favored inflation indicator, will likely indicate that inflation remained persistent in March.

The information comes just before the Fed is expected to raise rates up an additional 25 basis points at its meeting next week. Given that stricter liquidity situations in the West often signal lower capital flows to Asia. Worries about increasing U.S. interest rates have hammered Asian markets in the last few weeks.

Asian FX declines; US dollar tamed as rate increases and economic indicators take front stage

When the Fed meets next week, it’s anticipated that relatively strong inflation would prompt a rate increase of at least 25 basis points (bps). With a slim chance of a comparable 25 basis point increase in June. Investors are factoring in a roughly 90% likelihood of this kind of move.

Most Asian currencies suffered from the likelihood of higher interest rates. As investors await further hints on Japanese inflation anticipated this week, the Japanese yen declined 0.2% on Monday.

However, the BoJ policy meeting on Friday—the first under new Governor Kazuo Ueda—will be the major topic of attention for the yen. Ueda is anticipated to keep the bank’s mega-loose policy in place for the time being. Although she may provide hints about a future intention to tighten, particularly considering how persistently low inflation has remained.  The South Korean won fell 0.4%.

The Chinese yuan decreased 0.2% to 6.9038 vs the dollar, approaching the crucial 7 levels. As concerns over the scale of the country’s economic rebound this year intensify. The Australian dollar decreased by 0.3 percent before this week’s expected inflation indications.

Crude oil prices decline due to rising rates and worry about the global economy.

The expectation of tighter supplies due to OPEC+ production cutbacks overwhelmed support for oil prices on Monday. And they dropped as worries about increasing interest rates, and the state of the world economy. Particularly the outlook for fuel consumption exceeded it.

By 04:09 GMT, Brent oil had been down 75 cents, or 0.92%, to $80.91 per barrel. While U.S. West Texas Intermediate crude had fallen 74 cents, or 0.95%, to $77.13 per barrel.

Both futures had their initial weekly decline in five weeks, as a result of a reduction in U.S.-indicated demand for gasoline from a year earlier. Which fueled concerns about a coming downturn in the biggest oil consumer in the world.

Gold

Gold prices increased somewhat on Monday following previous declines. Yet they are still struggling due to concerns about an impending Fed interest rate increase. As well as the recent rise in Treasury rates. The value of gold fell for two weeks in a row as concerns that the Fed will continue raising interest rates this year.

Given that the chance cost of storing gold bullion, which gives no returns, increases when loan rates rise. Such a situation signals a further decline in the price of gold. As a result of this idea, gold fell below the $2,000 level and the dollar gained strength.