Asian stock markets could lean towards a positive performance, buoyed by optimism from Wall Street, where stocks advanced due to lower US bond yields. This was particularly influenced by a notable quarterly announcement about government securities, which resulted in a decline of the USDJPY pair below the 148.00 level. This movement in the Yen could further encourage investors to favour Japanese stocks. However, a cautious stance prevails due to the recent decision to dismantle China’s Evergrande Group, which introduced a significant risk element. Nonetheless, the market remains hopeful for additional support from China, maintaining a cautiously optimistic outlook in the near term. Should China refrain from providing further assistance and its economy continues to slow, investors might reconsider their risk-oriented strategies.
Markets are also bracing for a series of important economic announcements. Immediate attention is on the Australian retail sales data, followed by key reports from the US, including the JOLTS job openings and consumer confidence indices in today’s session. These reports precede the Federal Reserve’s decision and press briefing on Wednesday, events that are highly anticipated by traders. The end of the month trade will also see crucial US employment figures and significant earnings reports from major technology companies, potentially increasing market liquidity and introducing short-term volatility. Moreover, geopolitical developments have drawn attention, particularly the tragic loss of three US servicemen in Jordan, attributed to a drone attack by groups linked to Iran. A robust response from the US could heighten the demand for safe-haven assets and possibly drive-up oil prices, especially if the situation escalates to involve Iran, potentially leading to oil sanctions.
