Asian markets are primed for a positive start to the new quarter following more evidence of the U.S. “soft landing” on Friday and figures on Sunday that showed manufacturing and service sector activity in China last month accelerated in tandem.
Trading volume on Monday will be lighter than usual with much of Europe still closed for the Easter holiday, but U.S. stock and bond markets are open again.
Asia’s economic calendar is packed with key indicators — manufacturing purchasing managers index reports from several countries including Japan; South Korean trade; Indonesian inflation; and Japan’s quarterly tankan business conditions surveys.
The exchange rates of Asia’s two largest economies will once again be under the spotlight – Japan’s yen remains in “intervention” territory, and while China’s yuan is also under pressure against the dollar but is at a 30-year high against the yen.
The yuan last week slipped in spot trading to its weakest level this year around 7.22 per dollar but the People’s Bank of China has kept the daily fixing rate virtually unchanged around 7.0950 for the past four days.
This suggests the PBOC doesn’t want any volatility or abrupt weakness. But Beijing’s predicament is exacerbated by the yuan’s exchange rate with the yen — it is at 30-year high against the Japanese currency, giving Tokyo a competitive advantage on the world trade stage.
But Beijing will have welcomed the latest earnings from tech giant Huawei, and official PMI figures that showed manufacturing activity expanding for the first time in six months.
