Asia week ahead: China Q4 GDP, earnings updates

After a good run for global equity markets, underpinned by the positive expectations that carried over from 2017, we find ourselves with a multitude of items to test investors’ confidence next week. 

People's Bank of China
Source: Bloomberg

One item that carries through from this week is the attention on bond market performances. While investors expected bond market volatility to pick up this year, it had unfolded early as developments surrounding Japan and China induced jitters, briefly capping gains for Asian indices, one to keep on the radar.

US earnings, data

We remain in anticipation for the first of US bank earnings and December’s CPI as we pen this, but the week ahead certainly carts more financial sector earnings and economic indicators from the US.

The likes of Citigroup, Bank of America and Goldman Sachs come in the heels of this week’s releases for a week dominated by financial sector earnings. Noise for big bank earnings had been widely expected as a result of tax law changes, and the market should be looking past any poor performances from these one-time charges. Nevertheless, any dips should be well-supported and could make for good entry given the expectations for longer-term improvement as a result of the tax reform and the bond yield trajectory. The financial sector ETF (XLF ETF) will be the vehicle to capture these moves next week.

Meanwhile, indicators including industrial production, housing starts and the University of Michigan consumer sentiment are also anticipated next week. Improvements for both industrial production and consumer sentiment have been penned in by economists with potential for upside surprises for the latter given the positive market performance of late.

The wash up of the above may mark for an upward bias in the coming week for both the US dollar and indices, though one would also need to be cognizant of a government shutdown risk into the end of the week. For the year-to-date star performer, the energy sector in US and Asia alike, Thursday’s OPEC monthly report will also be one to watch.

China’s Q4 growth

China’s Q4 GDP will be the key release in the coming week with market’s consensus pointing to a slowdown to 6.7% year-on-year (YoY), bringing full year growth to 6.8%. Accompanying the release will be December’s industrial production, retail sales and fixed asset investments, mostly expected to stay unchanged from November’s figures. Early releases for Q4 have seen some moderation, particularly for data such as industrial production and retail sales, supporting the expectations. Watch for deviation from consensus for an impact on the broad Asian region.

Additionally, indicators including Japan’s machine orders, producer price inflation, and tertiary industry activity are some items due. For the local Singapore market, December’s non-oil domestic export will be watched with a YoY acceleration projected. As previously highlighted, the local STI sees resistance ahead of the mid-2015 high at 3549.85 and has found 3520 levels a region to consolidate this week. The interest will be to see if prices may attempt a break in either directions, which may take a strong trigger. 

Denne informasjonen er utarbeidet av IG, forretningsnavnet til IG Markets Limited. I tillegg til disclaimeren nedenfor, inneholder ikke denne siden oversikt over kurser, eller tilbud om, eller oppfordring til, en transaksjon i noe finansielt instrument. IG påtar seg intet ansvar for handlinger basert på disse kommentarene og for eventuelle konsekvenser som et resultat av dette. Ingen garanti gis for nøyaktigheten eller fullstendigheten av denne informasjonen. Personer som handler ut i fra denne informasjonen gjør det på egen risiko. Forskning gitt her tar ikke hensyn til spesifikke investeringsmål, finansiell situasjon og behov som angår den enkelte person som mottar dette. Denne informasjonen er ikke utarbeidet i samsvar med regelverket for investeringsanalyser, så derfor er denne informasjonen ansett å være markedsføringsmateriale. Selv om vi ikke er hindret i å handle i forkant av våre anbefalinger, ønsker vi ikke å dra nytte av dem før de blir levert til våre kunder. Se fullstendig disclaimer og kvartalsvis oppsummering.

CFDer er komplekse instrumenter som innebærer stor risiko for raske tap på grunn av giring. 79 % av alle ikke-profesjonelle kunder taper penger på CFDer hos denne leverandøren.
Du burde tenke etter om du forstår hvordan CFDer fungerer og om du har råd til den høye risikoen for å tape penger.
CFDer er komplekse instrumenter som innebærer stor risiko for raske tap på grunn av giring.