Sign up for Reuters newsletters

A look at the day ahead in Asian and global markets

By Jamie McGeever, Columnist, Global Finance & Markets

Data refreshes every time you open this email. For more Asian market news, click here. Please send any feedback to morningbid@thomsonreuters.com” rel=”noopener” style=”text-decoration: underline; color: #0274b6;”>morningbid@thomsonreuters.com.

Chinese industrial profits and Australian inflation top the Asian and Pacific economic calendar on Wednesday, against a backdrop of reasonably firm global equity markets and risk appetite ahead of key U.S. inflation data due later in the week. 

China’s President Xi Jinping attends the Leaders Retreat, during the Asia-Pacific Economic Cooperation (APEC) Summit in San Francisco, California, U.S. November 17, 2023. REUTERS/Loren Elliott

The economic, business and political spheres are also set to collide in Beijing, where Chinese President Xi Jinping will meet with U.S. business leaders, according to three sources with knowledge of the matter, in a follow up to his November dinner with U.S. investors in San Francisco.

The audience with Xi follows Chinese Premier Li Qiang not meeting visiting foreign CEOs at the China Development Forum in Beijing on March 24 to 25, which reignited concerns over transparency in China’s economy and deteriorating economic ties with the United States.

Graphics are produced by Reuters.

But Xi’s personal intervention might be a sign of his commitment to ensuring China is open for business, and improving Sino-U.S. relations. Or at least preventing them from deteriorating any further.

China’s economy, markets and investors could certainly do with some good news.

Graphics are produced by Reuters.

Chinese stocks are on track to post their first quarterly gain in four quarters, but that is due to a strong rebound from five-year lows in February that has since faded – Chinese stocks are barely up for the month of March.

This has held Asian stocks back too – the MSCI Asia ex-Japan index is up only 1% this year, significantly lagging the MSCI World (+7%) and the MSCI global emerging market index (+1.5%).

Figures on Wednesday will give the first insight into the health of China’s industrial firms’ profitability this year, with January and February numbers due for release. 

Industrial profits fell 2.3% in 2023, their second straight yearly decline. But there were some signs of improvement at the end of last year – profits rose 16.8% in December from a year earlier, extending gains for a fifth month.

The other main economic indicator on Wednesday is Australian consumer inflation for February. Economists expect the annual rate to rise slightly to 3.5% from 3.4% in January.

Aussie rates traders don’t expect the Reserve Bank of Australia to begin cutting rates until September, and are only pricing in 40 basis points of easing this year.

The yen, meanwhile, remains perilously close to lows not seen since 1990. Japanese officials are cranking up the verbal intervention – Finance Minister Shunichi Suzuki warned on Tuesday that “rapid currency moves are undesirable” – but it isn’t translating into much upside for the yen.

That may only come if there’s a sufficient decline in U.S. yields and rate expectations, which may not come until after U.S. PCE inflation on Friday. A hotter-than-forecast report, however, and the yen could quickly slide through 152 per dollar and force Tokyo to act.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Sponsors are not involved in the creation of newsletters or other Reuters news content.

Advertise in this newsletter or on Reuters.com

Morning Bid is sent every morning. Think your friend or colleague should know about us? Forward this newsletter to them. They can also sign up here.

Want to stop receiving this newsletter? Unsubscribe here.
To manage which newsletters you’re signed up for, click here.

Reuters Terms & Conditions and Privacy Statement