Asian markets certainly remain in anticipation of the results between the two Koreas’ meeting, one for risk sentiment.
Looking ahead to the fresh week, which also marks the commencement of May, there lies a heavy calendar for both earnings and meetings with central banks in Australia and the US convening. While it also would see Japan away for most of the week, Tuesday would be the day where most of Asia will be on Labour Day holidays, one to note. The old adage of ‘
sell in May and go away’ could certainly return to haunt us as we step into the new week, though as with the current indecision in the market, it remains one debatable, so hold your horses there.
Looking at the items up ahead, the focal point clearly lies with the US next week as we find both the May Federal Open Market Committee (FOMC) meeting and April non-farm payrolls (NFP) due. We certainly have had quite a tumultuous lead-up for a meeting that is accompanied by neither projections nor press conference, making it challenging for us to glean any fresh insights. While reasons for cautiousness had been bountiful, the rising inflation expectations would be difficult for the Fed to ignore and the meeting’s policy statement would be the relevant item up for scrutiny. Ahead of the meeting, we would also find the March’s core PCE figures with a Reuters poll showing analyst’s expectations for a pick up that would feed into views for a reduction of the dovishness stemming for the Fed. A series of Fed speakers’ have also been lined up in the week post-meeting, ones to watch for impact across asset classes.
Into Friday, US’ March NFP would also be released alongside average hourly earnings and unemployment data. The current market consensus had pointed to an increase in April’s payrolls to about 200k from the 103k disappointment in March. Meanwhile, average hourly earnings could moderate slightly to 0.2% month-on-month just as unemployment rate improve to only 4.0% from 4.1%. A realisation of the above could certainly have mixed impact upon equity prices that would also find its footing from earnings guidance with approximately 30% of the companies on the S&P 500 index due to update Q1 performance.
Besides the abovementioned, we are certainly finding a slew of releases in the Asia-Pacific region. Amid the quiet Tuesday, the Reserve Bank of Australia will update their monetary policy decision with no changes expected. The start of the new month, however, delivers the widely followed PMI numbers for Asia including that of China. Official PMI results will be expected on Monday ahead of April’s Caixin manufacturing and services PMIs on Wednesday and Friday respectively. A slowdown had been penned in by economists, one to be confirmed and weighed against the slew of US influences.
For the local Singapore market, look to the release of bank earnings, particularly with DBS Group Holdings Ltd. and United Overseas Bank Ltd. amongst the lot. Strong expectations have been baked in for Singapore’s first quarter bank earnings from the trio of big banks. While there appears to be little contention that we would likely find good performances from the first quarter results, the question lies with how the price reactions would follow.