Asian stock markets may experience a choppy price action as the broader global financial markets show no clear direction, following recent peaks in both the US and Japan. Chinese stocks remain subdued, with investors looking for additional fiscal and monetary stimulus. However, it’s notable that Chinese markets might see a boost from strong earnings reported by JD.com. Market dynamics could lean towards caution, especially after gains were pared back in the New York afternoon session amid heavy selling. This was partly due to Federal Reserve Chair Jerome Powell’s testimony to Congress, which reiterated a cautious stance on early interest rate reductions.
Moving forward, attention will turn towards upcoming economic announcements and central bank actions. Market watchers are particularly interested in China’s data, with the February trade figures expected to be influenced by the Lunar New Year holiday. This makes the combined data for January and February a more reliable indicator due to the holiday’s variable timing. While imports are anticipated to recover, exports may not fare as well. The dip in export performance is attributed to weaker global demand and a degree of economic decoupling. The upcoming US Nonfarm Payrolls report on Friday is highly anticipated for further market guidance. The technology sector has shown uneven performance, with significant tech companies falling behind. Investors are also preparing for the forthcoming US Treasury bond auctions and the Federal Reserve’s pre-meeting quiet period.
