By Jamie McGeever
(Reuters) – A look at the coming day in the Asian markets.
On Tuesday, there is no news in Asia on the market, with an Australian decision on interest rates, the technological boom of China and the Japanese GDP greening at the front and the center of investors, In a context of geopolitical drama which takes place around American-European relations and Russia- war of Ukraine.
On the economic level, the main event will locally be the decrease in reserve quarter reserve of Australia at its cash rate at 4.10%, its first reduction of more than four years.
The softening of inflation opened the door to a rate reduction cycle, but only shallow money markets only rate 50 base points of additional relaxation this year after the move on Tuesday.
If the RBA makes the rates on Tuesday, it will be one of the last central banks G10 to do so. The Central Bank of Norway has not yet started to mitigate, while the Bank of Japan increases rates.
This cycle could accelerate, after Monday’s figures showed that the Japanese economy increased at an annualized rate of 2.8% in the October quarter, almost three times faster than consensus 1.0% in a reuters survey. The highest forecast in the survey of 17 economists was 2.2%.
Bond yields of the government and the Japanese government are increasing. Recent inflation data and wage growth have also surprised the increase, but the Bank of Japan will be cautious about the increase in rates after decades of deflation and ultra-launched policy.
JGB yields of two years and 10 years have already been the highest since 2008 and have increased sharply in recent months, doubly, doubly since September. These are great movements and the impact on businesses, households and investors remains to be seen.
The bounce on the Chinese markets continues, on the other hand, with technological actions included in Hong Kong reaching a three -year summit on Monday while President Xi Jinping sat with the best technological leaders in Beijing. The Hang Seng Tech index increased by more than 30% in a month.
The symbolism of the rare meeting of XI with technological leaders is powerful, reflecting the concerns of political decision -makers concerning the economy and technological development of China, and marks a net reversal of regulatory repression on technology four years ago .
Baidu’s actions changed on Monday, however, wiping $ 2.4 billion on its market value after the founder of the search engine giant was not spotted at the meeting.
These market movements, in their way of seismic nature, come against truly seismic geopolitical developments around America’s ties with Europe and the role of President Donald Trump in the brokerage of a truce between Ukraine and the Russia with Russian President Vladimir Putin.
