China’s embattled property developer Evergrande will be under the spotlight again following media reports last week that it has held talks with creditors who opposed its restructuring plan.
Asian markets on Monday will also give their initial reaction to news over the weekend of an expected U.S.-Sino summit between presidents Joe Biden and Xi Jinping next month. Tech and chip stocks could be particularly sensitive.
On top of that, the U.S. earnings season rolls on, Japan’s corporate reporting floodgates open, and month-end flows across all asset classes could be powerful. Oh, and there is the Federal Reserve’s interest rate decision on Wednesday too.
Investors in Asia wade into that sea of event risk in slightly better shape than might immediately appear to be the case, having been hit hard by the surge in U.S. bond yields and widespread tightening of tightening of financial conditions.
But the MSCI emerging market index and Asia ex-Japan index’s falls of around 0.6% last week were notably shallower than the MSCI Work index’s 2% slide.
Their falls in October are both on track to be around 3.5%, not quite as bad as the MSCI World’s and S&P 500’s respective declines of 4.2% and 5.4%. Perhaps a period of relative outperformance for Asian and emerging market assets lies ahead?
China’s recent economic and market signals, at least, are brightening a little.
