By Andrew Galbraith
SHANGHAI (Reuters) – Most Asian stock markets rose on Monday, but the gain was limited as investors expected US retail data and corporate earnings to measure the world's largest economy ahead of a likely US price decline later this month.
European markets seemed to be just as cautious, with the pan-region down 0.1
German increased by 0.04%, futures were down 0.18%, and financial spreaders saw France's opening flat.
MSCI's widest Asia-Pacific stock index outside of Japan was up to 0.3%, with losses in Chinese stocks falling elsewhere in the region.
China's blue chip CSI300 index fell 0.3% as investors feared lower growth in the world's second largest economy and the impact of Chinese-American trade war, although new data highlighted Beijing's efforts to increase spending. ()
South Korea increased 0.4% after a slow start, and Taiwan shares rose 0.1%.
The Australian market happened 0.1%, unaffected by the release of bad minutes from the Reserve Bank of Australia's July meeting.
Japan's stock market index ended almost 0.7%.
Encouragement of Chinese June data on Monday had provided some relief for investors worried about the economic outlook, but the pressure on global business and investment from the war and declining global growth reinforced expectations of political easing by major central banks.
"A US downturn should make it easier for central banks in Asia to ease their policies, increase domestic demand in the region," said Yukino Yamada, senior strategist at Daiwa Securities.
"We still don't know what to expect from The trade war between the United States and China … But there are vague expectations that Trump will be quiet in the summer, and the question will be put on the back burner near China's national day (early October), she said.
Last night, US President Donald Trump showed no sign of couch forcing his attitude to China, and warning that Washington could have more pressure when trade negotiations sputtered.
U.S. The data on Tuesday is expected to show that retail sales increased by 0.1% in June, according to the media estimate of economists asked by Reuters. However, a decrease in net interest margin reported by Citigroup (NYSE 🙂 in its mixed quarterly report underscored the risk to financial corporations in a lower interest rate environment.
This decline partly overshadowed better than expected earnings figures that trigger a fall in stocks in other banks due to concerns that it would result in lower industry profits.
"It's clear that the biggest risk for the last rally is the earnings season," said Ryan Felsman, senior economist at CommSec in Sydney.
Signs of trade tensions that weigh on corporate profits and the declining effect of tax breaks will emphasize US Federal Reserve's concerns about slowing down investment, he said.
"It takes into account the concern about the world economy, slowing down the US economy, but also the need for potentially more aggressive Fed rebates to support the US economy ahead," Felsman said.
Markets have fully priced at a 25 basis point cut by the Fed at the meeting at the end of this month.
The quiet Asian trading session followed an equally poorer day on Wall Street, with the rising 0.1% increasing 0.02% and adding 0.17%.
Signs of a better economic situation in the United States have led to a weakening of the US yield curve, led by higher longer dated dividends.
It reversed slightly on Tuesday, with the return on the benchmark being higher to 2.0973% compared to its US-rated 2,092% on Monday.
The two-year return, carefully monitored as a measure of trader's expectations of the Fed funds, grew faster and increased to 1.8416% compared to a US close to 1.833%.
In the foreign exchange market, the dollar was up 0.09% against the yen at 108.00 and the euro crossed up 0.04% and bought $ 1.161.
The one who tracks the greenback against a basket of six major rivals was one touch stronger at 96,962.
Oil prices followed earlier signs of signs that the impact of a tropical storm on US Gulf Coast production would be short-lived.
Global benchmark was flat at $ 66.48 per barrel, and the US West Texas Intermediate (WTI) crude deep 0.12% to $ 59.51 per barrel.
Gold trade echoes the cautious tone of stock markets ahead of US data. The precious metals were last down at 0.03% in the spot market to $ 1,413.20 per ounce.