Chinese stock markets, meanwhile, get a chance to recover from Monday’s 0.5% fall – the steepest in three weeks – now that Beijing has completed its military drills around Taiwan.
Investors can turn their attention back to the economic data, specifically inflation on Tuesday. Producer price inflation is expected to have fallen further in March, according to analysts’ estimates of a year-on-year decline of 2.5%, which would be the fastest pace of deflation since June 2020.
The annual rate of consumer price inflation is expected to remain unchanged at 1.0%, the slowest in a year, and the monthly rate is expected to rise to 0% from -0.5% in February.
If these forecasts are broadly accurate, price pressures in China would appear to be extremely benign, giving the central bank room to loosen policy and stimulate the economy.
In South Korea, the central bank looks to have ended its tightening cycle and will likely keep its main interest rate on hold at a 15-year high of 3.50% on Tuesday. With the economy on the brink of recession, it could well cut rates later this year.
