Asia market morning update - busy week for markets

A broadly positive open is expected for Asia markets in this holiday-shortened week, a busy one nonetheless with key earnings and economic releases queued.

US Q1 GDP surprise

Wall Street concluded last week with the US Q1 GDP surprise seeing the strongest Q1 growth in four years, thereby boosting markets. Broad-based gains can be seen across the likes of the comprehensive S&P 500 index, though energy stocks had been afflicted by sector specific issues. While the headline growth figure does lay to rest concerns of Q1 weakness, a deeper dive into the contributors breed worries of sustainability into the next few quarters. The strong growth will nevertheless serve as a reassurance for the Fed as they meet this week to decide on monetary policy whereby no changes in rates or their patient stance is expected.

Meanwhile as told above, energy stocks are expected to present a drag on the broad market into the start of the week. Following President Donald Trump’s comments urging OPEC to raise production and thus lower prices, WTI futures was seen sinking to a 3-week low on Friday in response. Likewise, with Brent crude trading back below $72 per barrel. Look to the implication on Asia markets at the start of the week with more details below.

Asia open

Asia markets are expected to commence the week edging higher amid the positive leads on hand. Over and above the strong headline growth number out of the US, Chinese President Xi Jinping’s weekend comments at the Belt Road forum highlighting positive trade messages had likely fuelled rosier sentiment with regards to US-China trade ahead of continued talks this week. Look to regional markets to come online with gains despite the ASX 200 falling prey to pressure including upon the energy sector in the morning.

Notably, for the local Singapore market, the heavyweight DBS which reported Q1 earnings ahead of the market open was seen overshooting expectations. At $1.65 billion in net income, this represents a beat of more than 10% from consensus with interest income underpinning the outperformance. Look to a boost across the Singapore banking sector with this release and for the broad index as well this Monday.

Levels check

S&P 500: The question as to whether the S&P 500 index can inch further this week after last week’s record high would be with the next 30% of companies on the S&P 500 index due to report earnings. The Federal Open Market Committee (FOMC) meeting is expected to see the same patient stance from the Fed, thereby supportive, while data in the form of payrolls on Friday is due to remain broadly benign. Pressure for short-term retracement persists, though strong beats in the earnings this week may still keep this uptrend going, one to watch.

US Dollar Index: The greenback strength had been one to reckon with last week after breaking above the strong resistance to print a near 2-year high on the US dollar index. While the FOMC is expected to effect little changes to influence the dollar this week, the continued streaming in of resilient data may keep the US dollar afloat relative to various counterparts including the EUR and GBP

USD/JPY: The golden week keeps the Japanese market away this week which would make for thin liquidity, perhaps placing the focus more strongly on this currency pair. Two-way fluctuations should may not come as a surprise particularly with various items on the table including US-China trade talks and Chinese PMI readings ones to influence the risk sentiment and the demand for the yen, one to watch.

US Crude: As told above, the deviation from the uptrend had been another case of President Donald Trump’s jawboning. WTI futures fell through to a three-week low on Friday before stabilizing around $62.90 levels. Profit-taking can be seen aggravating the fall though it remains to be seen if this marks a reversal with the likelihood of OPEC heeding the President’s call a question.

Friday: S&P 500 +0.47%; DJIA +0.31%; DAX +0.27%; FTSE -0.08%

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Updated
Change

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
China 300
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.