Asian stocks traded cautiously on Monday, April 17, as investors awaited the release of Chinese economic data and the ongoing US earnings season. The mood shift on the outlook for US interest rates has also been a cause of concern, with CME futures implying an 81% chance of the Federal Reserve hiking by a quarter point to 5.0-5.25% in May.
Chinese economic data to offer insight into economic recovery
Investors are keeping a close eye on the release of Chinese economic data, as it offers insight into how the world’s second-largest economy is recovering. The data is expected to show strong growth in the first quarter of 2023, as China continues to recover from the effects of the COVID-19 pandemic. The data includes GDP, industrial production, retail sales, and fixed asset investment, among others. Any surprises in the data could cause a shift in the mood of the markets.
US earnings season in full swing
The ongoing US earnings season is another factor causing caution in Asian markets. This week sees a number of major companies reporting their earnings, including Tesla, Apple, Microsoft, and Alphabet. Investors will be closely monitoring these earnings reports for any indications of how the US economy is performing and what the future may hold. Any surprises in the earnings reports could cause a shift in the mood of the markets.
Mood shift on US interest rates
The potential hike in US interest rates has also caused a mood shift in the markets. CME futures are currently implying an 81% chance of the Federal Reserve hiking interest rates by a quarter point to 5.0-5.25% in May. This would be the first interest rate hike since 2018, and investors are concerned about the impact it could have on the global economy. Higher interest rates could lead to a slowdown in borrowing and spending, which could have a negative impact on economic growth.
Conclusion
In conclusion, Asian markets are currently trading cautiously due to a number of factors, including the ongoing US earnings season, the release of Chinese economic data, and the potential hike in US interest rates. Investors are closely monitoring these developments and are prepared for any surprises that may arise. The global economy is still recovering from the effects of the COVID-19 pandemic, and any negative news could cause a shift in the mood of the markets. As always, investors should remain cautious and keep a close eye on the markets.
