Asian Stocks to Fall Ahead of China Data Drop: Wrapping Markets

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(Bloomberg) — Asian stocks are expected to fall on Monday ahead of more Chinese data and a vow from the nation’s regulators to stabilize markets. South Korean assets will be closely watched after the ouster of President Yoon Suk Yeol.

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Equity futures in Australia, Hong Kong and Mainland China pointed to losses while those in Japan gained. The S&P 500 shed its first losses on Friday ahead of a possible hawkish cut by the Federal Reserve later this week.

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The moves came as investors prepared for the last full week of trading this year with a series of central bank meetings including the Fed, the Bank of Japan and the Bank of England. Traders may start to take advantage of this year’s nearly 20% rally in global stocks, boosted by gains in US tech stocks and excitement over AI.

“The uncertainty this brings could lead to a continuation of positions and reduce risk-buying activity,” said Chris Weston, head of research at Pepperstone Group in Melbourne. “As the stock market has advanced so far this year, factor in the high risk of events and events that excite traders this week.”

Chinese stocks are expected to extend the selloff that began on Friday amid disappointment after Beijing promised to boost spending but failed to provide details on the fiscal stimulus. Regulators over the weekend vowed more efforts to stabilize property and equity markets, including increased monitoring of futures and volatility trading, ahead of the release of economic data to be released including retail sales and industrial production.

The People’s Bank of China may also keep a lid on the yuan with its daily corrections as the currency faces pressure over US tariffs, according to the Commonwealth Bank of Australia.

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“We expect the PBOC to continue to fix USD/CNY below 7.2000 to reduce the strength of the US dollar until there is more clarity on US tariffs,” strategists including Joseph Capurso wrote in a note to clients.

Elsewhere in Asia, the Bank of Korea pledged to use “all available policy tools” to stabilize stock and financial markets after Yoon was impeached on Saturday for his short-lived attempt to impose martial law. Yoon is suspended from exercising presidential powers, and the constitution requires the prime minister to assume the role of acting president.

“Political unrest is likely to continue but is unlikely to trigger an overreaction of the market in USD/KRW and Korea rates,” Societe Generale analysts including Suktae Oh wrote in a note to clients. “All of this political upheaval should lead to more monetary and fiscal stimulus spending early next year.”

Meanwhile, the world’s largest bond market plunged deeper, with the 10-year average having its worst week since October, 2023.

After a series of mixed data last week — including slightly faster inflation and higher-than-expected unemployment claims — swaps traders have bet back on the Fed’s easy path. They are now cutting prices by around three quarters over the next 12 months. Last week they had a better than 50/50 chance of making the fourth cut and there could be another draw to come.

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Elsewhere, French bond futures may react when trading resumes later in the day in Asia after Moody’s Ratings downgraded the nation’s credit rating to Aa3 from Aa2, three levels below the maximum rating. France has already been downgraded by Fitch and S&P, putting pressure on the new government to manage the ballooning deficit.

In commodities, oil rose on Friday as regional tensions and the prospect of sanctions against Russia and Iran limited speculation of a supply glut next year. Gold has fallen for the second time.

Important events this week:

• Japan Jibun Bank Manufacturing and Services PMI, machinery orders, on Monday
• China retail sales, property prices, industrial production, Monday
• India HSBC Manufacturing and Services PMI, prices, Monday
• Eurozone HCOB Manufacturing and Services PMI, Monday
• ECB President Christine Lagarde speaks, Monday
• UK S&P Global Manufacturing and Services PMI, Monday
• Bank of Canada Governor Tiff Macklem speaks, Monday
• UK jobless claims, unemployment, Tuesday
• Canada CPI, Tuesday
• Indonesia rate decision, Wednesday
• Thailand’s standard decision, Wednesday
• UK CPI, Wednesday
• Eurozone CPI, Wednesday
• The decision of the American rate, on Wednesday
• New Zealand GDP, Thursday
• Japan rate decision, Thursday
• Taiwan rate decision, Thursday
• Decision of the Philippine level, Thursday
• The decision of the Swedish level, Thursday
• The decision of the Norwegian level, Thursday
• UK BOE rate decision
• The US updated its GDP on Thursday
• Mexico rate decision, Thursday
• Japan CPI, Friday
• Prime loan rates in China, Friday
• Eurozone consumer confidence, Friday
• US personal income, spending and PCE inflation, Friday
• Canadian retail sales, Friday

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Some of the main steps in the market:

Shares

• Hang Seng futures were down 0.3% as of 7:39 am Tokyo time
• S&P/ASX 200 futures down 0.5%

Funds

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.0497
• The Japanese yen was little changed at 153.67 per dollar
• The onshore yuan was little changed at 7.2804 per dollar
• The Australian dollar was little changed at $0.6358

Cryptocurrencies

• Bitcoin rose 0.4% to $103,231.04
• Ether rose 0.8% to $3,885.33

Bonds

• Australia’s 10-year yield advanced three basis points to 4.32%

Goods

• Local gold fell 1.2% to $2,648.23 an ounce

This story was produced with the help of Bloomberg Automation.

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