Morning news: Central bank bonanza, stocks on a roll

June 12 (Reuters) – A look at the day ahead in Asian markets from Lewis Krauskopf.

Asian markets will turn their attention to a series of central bank meetings after ending last week on an upbeat note.

MSCI’s gauge of the world’s stock markets hit its highest point in 13 months on Friday. Wall Street was upbeat as the S&P 500 posted its fourth straight weekly gain and a 20% gain from its October low, meaning the benchmark had confirmed a bull market, as defined by many investors.

Meanwhile, Japan’s Nikkei has posted nine consecutive weekly gains. Even battered China stocks managed to finish higher on Friday, boosted by the auto and technology sectors, although disappointing inflation data weighed on investor sentiment.

Of course, a busy week can quickly change the mood. Producer price data in Japan is expected. In India, reports on inflation and industrial production are also due on Monday.

Reuters Graphics Reuters Graphics

But investors will largely be looking forward to major central bank meetings later in the week. The Federal Reserve is expected to pause its rate hike cycle when it issues its policy decision on Wednesday – although a US consumer price inflation report on Tuesday could complicate those plans if it turns hot.

A day after its US counterparts, the European Central Bank is expected to raise interest rates by another 25 basis points, with traders seeking clues about the next step. On Friday, the Bank of Japan meets as newly appointed BOJ Governor Kazuo Ueda has signaled ultra-easy policy will remain until wage growth and inflation are stable and sustainable.

Ahead of the central bank bonanza, the US dollar had fallen back after strengthening in May. In other asset price action, oil prices fell on Friday to record a second straight weekly decline as disappointing Chinese data added to doubts about demand growth.

Here are key developments that could give more direction to the markets on Monday:

– Japanese producer prices (May)

– India CPI data (May)

– India industrial production (April)

By Lewis Krauskopf; Editing by Diane Craft

Our standards: Thomson Reuters Trust Principles.

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

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