Asia Week Ahead: Trump meetings and GDPs

Asian equity markets drew little inspiration from the US in the past week, except for the boost at the end of the week.

Source: Bloomberg

While the US remains in this Trump-on, Trump-off trading climate, Asian indices had seen general buying interest picking up against the backdrop of stabilising macroeconomic conditions. Key Asian indices, the Nikkei 225, HSI and STI rallied strongly since the start of the week with week-to-date gains exceeding their US counterparts.

Ahead of the meeting between President Donald Trump and Japanese prime minister Shinzo Abe today, the switch had also flicked back to a Trump-on environment. In a meeting with US airline CEOs on Thursday, President Donald Trump highlighted that something 'phenomenal' with regards to tax could be announced over the next two to three weeks. This have had and may continue to elevate sentiment in the near term.

Correspondingly, havens including gold saw prices retreating into the end of the week, falling to sub-$1230 levels on Friday. Despite the brief tune-up of optimism, the week ahead nevertheless holds key events and indicators that could shape trades.

US leads

Besides the political uncertainty surrounding Europe, President Donald Trump’s actions have proven to draw jitters in past weeks. The week ahead finds meetings between President Donald Trump and leaders of Israel and Canada lined up. Trade between the world’s largest economy and the rest of the world have been a key concern for global markets since the US elections in light of President Donald Trump’s protectionist stance.

The upcoming meeting between President Donald Trump and Canadian prime minister Justin Trudeau could potentially open up discussions on developments in the North American Free Trade Agreement (NAFTA), an item that the US president had put up for renegotiation. A dive into a protectionist outcome could once again kick-up de-globalization worries.

Notably Federal Reserve chair Janet Yellen will also be testifying before Congress between Tuesday and Wednesday and delivering the semi-annual Monetary Policy Report. Admittedly, the Fed had kept the rhetoric largely unchanged since the December Federal Open Market Committee (FOMC) meeting and economic projections update.

This would nevertheless be Yellen’s first appearance since January’s jobs report and the market would keep a close watch on updates here for US dollar influences and more.

Asian indicators

A series of GDP updates can be anticipated from Asia in the week ahead. The key focus for Asian markets would likely be Japan’s Q4 preliminary growth rate to be released on Monday. The market consensus for Q4 GDP currently sits at 1.1% year-on-year (YoY) according to Bloomberg, which represents a slowdown from the previous quarter. Malaysia will also be updating the market on their Q4 GDP on Thursday while Singapore and Taiwan are expected to release their final growth figures from Wednesday onwards.

For the local market, Singapore’s January non-oil domestic exports (NODX) will be released on Friday and the market is expecting some moderation after two months of exceptional growth. With the latest better-than-expected Chinese trade data, one would not be surprised to see next week’s NODX figure falter less than expected. Notably, Singapore’s three local banks will be reporting on earnings in the coming week. Taking the lion’s share on the local bourse, the update is likely to exert a significant influence on the STI. 

Deze informatie is opgesteld door IG Europe GmbH en IG Markets Ltd (beide IG). Evenals de disclaimer hieronder bevat de tekst op deze pagina geen vermelding van onze prijzen, een aanbieding of een verzoek om een transactie in welk financieel instrument dan ook. IG aanvaardt geen verantwoordelijkheid voor het gebruik dat van deze opmerkingen kan worden gemaakt en voor de daaruit voortvloeiende gevolgen. IG geeft geen verklaring of garantie over de nauwkeurigheid of volledigheid van deze informatie. Iedere handeling van een persoon naar aanleiding hiervan is dan ook geheel op eigen risico. Een door IG gepubliceerd onderzoek houdt geen rekening met de specifieke beleggingsdoelstellingen, de financiële situatie en behoeften van een specifiek persoon die deze informatie onder ogen kan krijgen. Het is niet uitgevoerd conform juridische eisen die zodanig zijn opgesteld dat de onafhankelijkheid van onderzoek op het gebied van investeringen wordt bevorderd, en dient daarom als marketingcommunicatie te worden beschouwd. Hoewel wij er niet uitdrukkelijk van weerhouden worden om te handelen op basis van onze aanbevelingen en hiervan te profiteren alvorens ze met onze cliënten te delen, zijn wij hier niet op uit. Bekijk de volledige disclaimer inzake niet-onafhankelijk onderzoek en de driemaandelijkse samenvatting.

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