Asia shares in pensive mood for earnings-filled week

SYDNEY, April 24 (Reuters) – Asian shares were broadly lower on Monday in a week packed with economic data and central bank meetings, along with earnings from the tech giants that have kept the S&P 500 afloat so far this year.

Market action was slow in the wake of Friday’s surprisingly strong surveys of business activity, which reinforced the arguments for higher interest rates.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 0.4%, while Japan’s Nikkei (.N225) rose 0.2%. Chinese blue chips (.CSI300) fell 0.4%.

Over in Australia, there was some weakness in mining shares (.AXJO) after Chile moved to increase state control of the lithium industry, which has the world’s largest reserves of the battery metal.

EUROSTOXX 50 futures and FTSE futures were both little changed. S&P 500 futures and Nasdaq futures fell 0.3% ahead of a busy week of earnings.

Apple Inc ( AAPL.O ) and Microsoft Corp ( MSFT.O ) alone have accounted for nearly half of the S&P 500’s gains through March, so there’s a lot riding on their outlook.

“We believe stalwarts Microsoft, Amazon and Google should all deliver cloud results that meet and likely exceed Street 1Q expectations this week despite recent market noise,” analysts at Wedbush Securities said.

“We also think a key narrative of tech’s earnings season will be the AI ​​arms race and each Big Tech player updating investors on their own AI ambitions/revenue strategy as Redmond battles Google and other tech stalwarts for the AI ​​trophy case.”

The US House of Representatives could vote this week on a Republican plan to raise the debt ceiling in exchange for spending cuts. Weak tax revenues mean the government could run out of money earlier than expected, and the risk of default has seen an increase in US credit default swaps.

Figures on US wages and economic growth this week are likely to reinforce the case for further tightening. The Atlanta Fed’s influential GDP Now tracker has the US economy growing at an annualized 2.5% in the first quarter, just a shade slower than the previous quarter.

BOJ GETS A NEW BOSS

Markets are pricing in an 86% chance that the Federal Reserve will raise interest rates by a quarter of a point at its meeting in the first week of May, and fully expect a similar increase from the European Central Bank with some risk of a half point move. ,

Central banks in Canada and Sweden meet this week, but most attention will be on the Bank of Japan for the first meeting chaired by the new governor, Kazuo Ueda.

Ueda said on Monday that policy easing needed to continue as inflation remained below 2% in trend terms.

Only three of 27 economists polled by Reuters expect the BOJ to begin tapering its yield curve control (YCC) policy soon, but there are reports that the central bank is considering conducting a comprehensive review of the impact of the easing.

“Media background suggests you don’t expect adjustments to the YCC, but it’s clear the writing is on the wall and the risk is for more significant change at the next meeting,” said Tapas Strickland, head of market economics at NAB.

In contrast, the head of Belgium’s central bank warned in an FT article on Monday that investors are underestimating how high borrowing costs in the eurozone will rise.

The differences in politics between Japan and the rest of the developed world have seen the yen weaken steadily in recent weeks, with the euro in particular hitting a six-month high.

The single currency was flat at 147.56 yen on Monday, while the dollar held at 134.35.

The euro held at $1.0980, within sight of its recent one-year peak of $1.1075.

A higher dollar and bond yields have weighed on gold, which fell 1.2% last week and last settled at $1,979 an ounce.

Chicago wheat rose nearly 1% after Russia threatened to end a grain deal that allows Ukrainian exports, raising concerns about world supplies.

Oil prices also lost ground last week, although planned OPEC production cuts provide some support.

Brent fell 66 cents to $81.00 a barrel on Monday, while US crude fell 67 cents to $77.20 a barrel.

Reporting by Wayne Cole; Editing by Christopher Cushing

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