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Morning news: Major macro signals from China, Japan

May 15 (Reuters) – A look at the day ahead in Asian markets from Jamie McGeever.

Big economic data from China and Japan, and a central bank rate decision from the Philippines could be the main regional drivers for Asian markets this week, with investors growing increasingly nervous about the US and global macro outlook.

World stocks ended last week on a shaky footing as concerns about the US debt ceiling, credit conditions and the cumulative effect of 500 basis points of Fed rate hikes overshadowed surprisingly strong US earnings.

These were some of the issues discussed at the three-day meeting of G7 economic leaders that ended on Saturday.

The MSCI World Index fell 0.5% – perhaps not a big deal, but its second straight weekly decline and the steepest since the US banking crisis erupted two months ago.

However, Asian shares ex-Japan rose for a second straight weekly gain, also not seen since early March.

If US tech stocks are flying — the Nasdaq rose for a third week and Wall Street’s rally this year is entirely thanks to AI-centric stocks, according to SocGen — Asian tech is stuck in quicksand.

The Hang Seng tech index fell last week for a sixth straight week, its longest losing streak since mid-2015 when the first tremors of the Chinese stock market earthquake were felt and just weeks before Beijing devalued the yuan.

The latest Chinese economic indicators have been shocking. Inflation and imports collapsed in April, casting serious doubt on the strength of the economy’s post-lockdown recovery and raising expectations for more policy easing.

Data for industrial production, retail sales and fixed assets for April this week will paint a more complete picture. More subpar numbers are likely to add to the selling pressure on Chinese shares – the Shanghai Composite had its worst week since March, while the blue chip index fell for a fifth week and also posted its biggest weekly drop in two months.

Japan’s first-quarter GDP figures will be released on Wednesday, and perhaps more importantly, the latest inflation figures are out on Friday.

Core inflation is far higher than the Bank of Japan would like and is expected to have accelerated again to 3.4% in April. Although new BOJ Governor Kazuo Ueda insists he will move slowly in reversing the bank’s super-loose policy, some analysts expect the BOJ to abandon control of the yield curve this summer.

Investors with exposure to Thailand are waiting to see how the election results could shift the balance of power, and first-quarter GDP numbers will be released on Monday, the same day the Philippines’ central bank is expected to keep interest rates on hold at 6.25%.

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

– Thailand GDP (Q1)

– India WPI Inflation (April)

– Price growth for corporate goods in Japan (April)

By Jamie McGeever; Editing by Lisa Shumaker

Our standards: Thomson Reuters Trust Principles.

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

Jamie McGeever

Thomson Reuters

Jamie McGeever has been a financial journalist since 1998, reporting from Brazil, Spain, New York, London and now back in the US again. Focus on the economy, central banks, decision-makers and global markets – especially currency and interest rates. Follow me on Twitter: @ReutersJamie

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