Asia week ahead: earnings, central banks, Chinese data in focus

It has been a packed week for markets thus far, dominated by the surge in global sovereign bond yields and their corresponding impact upon markets.

Source: Bloomberg

While it would not be surprising to find this theme persisting into the fresh week, we would also find a series of data and events worth watching.

What to watch for the USD

After a brief respite for the US dollar at the start of the week, we have seen the US dollar index down once again into the end of the week, awaiting January’s labour updates. With the exception of the Chinese yuan and Thai baht, most Asian currencies did however find week-to-date losses against the greenback, bringing into question the trajectory of the USD next.

The upcoming week would be a comparatively lighter one whether in terms of events or data. From the US end, it does look like we would only have a couple of Fed speakers and data in the docket. This includes January’s US non-manufacturing Institute of Supply Management (ISM) index, December trade balance and Job Opening and Labour Turnover (JOLTs) reports. It is also hard to imagine, but close to three weeks have passed for us to ponder over a government shutdown possibility once again as the February 8 deadline looms. A stop-gap bill may very likely come into fruition though we do have some noise around the matter once again, one to follow for impact upon the USD next week.

Additionally, two voters, New York Fed President William Dudley and San Francisco Fed Williams are expected to add colours to the Fed’s thoughts after this week’s Federal Open Market Committee (FOMC) meeting. A hawkish slant appears to be the status quo expectation, so any surprise for the USD would likely be on the downside. Central banks in Australia, New Zealand and the UK would also meet with no changes to monetary policy expected.

Earnings focus

For equity markets, there remains much to watch with another 18% of the companies on the S&P 500 index due to report in the coming week. Earnings in Asia will also heat up, with a particular focus for Singaporean investors on banks share performances.

We have certainly gotten a better picture of the latest earnings season with close to half of the companies on the broad-based S&P 500 having issued their earnings reports. An average of approximately 80% of the companies have exceeded analysts’ expectations with regards to sales and earnings based on the Bloomberg tally, shouting out the fact that earnings have been nothing short of spectacular. While the rally in bond yields retain their stress, the market is expected to keep looking to earnings to draw inspirations.

For the local Singapore Straits Times Index (STI), the key banking sector would also find the first of the trio, DBS Group Holdings Ltd. update its fourth quarter performance before the markets open on Thursday. Positive expectations have been pencilled in for the country’s biggest bank, one to follow for impact upon the whole sector and the overall index.

Asia indicators

A variety of indicators and central bank decisions would also see the light of day here in Asia with particular focus on the set of Chinese updates. Caixin services Purchasing Managers Index (PMI) will be due on Monday, ahead of trade and inflation data on Thursday and Friday respectively. Exports are seen accelerating in January though we have mixed data thus far, placing this optimism in question. Ahead of the Chinese New Year holidays, the market would likely take the data with a pinch of salt. Meanwhile central banks in India and Philippines are also convening to decide rates, eyeing a hike for the latter.  

Denne informasjonen har blitt forberedt av IG Europe GmbH og IG Markets Ltd (begge IG). 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.

Finn artikler av analytikere

CFDer er komplekse instrumenter som innebærer stor risiko for raske tap på grunn av giring. 81 % 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.