The week ahead

Global equity markets will have to contend with a slew of economic data and earnings season.

The weak US payroll numbers, from Friday, has prepared the market for a weak US economic data this week. Retail sales and industrial productions are likely to show an impact from the severe weather conditions.

Employment will likely hold steady after the positive momentum we have seen. The blip in the US economic data has given the emerging equity markets a sigh of relief as investors expect the Fed to keep at their pace of tapering without accelerating.

At the end of the week, the MSCI Emerging Markets index have pared its retreat with some countries such as Thailand and Indonesia, outperforming with a weekly return of 5% and 3.8% respectively, while the MSCI USA holds on to 1.4%.

The Indonesian government has reversed some of the ban on the mineral ore exports by giving exceptions to copper concentrate exporters. The government has been pushing companies to build processing plants in the country. This last minute relaxation of rules will give a boost to exports and GDP.

Protestors have gathered in the streets of Bangkok in an attempt to shut-down the city centre. Most businesses have closed for the day due to the anticipation of large crowds of protestors. The opposition leader is asking for Yingluck to step-down and scraps the election for next month. It is interesting to note that foreign funds have been slowly making their way into Thai equities, this year. So far, there’s been a net inflow of $89.4m, as of 10 January. In contrast, there is a net outflow of foreign funds from South Korea totalling $175.2m, as of 13 January.

Out of all the Asian markets index I track, the iShares China is the worst performer with a -0.63% for the week. The contraction in their economic data and the resurgence of the IPO in the equity markets has caused investors to stay on the side-lines.

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