Title: Asian Markets Eye Boost from US Congress Deal, Mixed Sentiment Looms
Asian markets are poised to receive a potential boost following a U.S. Congress deal aimed at preventing a government shutdown. However, mixed sentiment is expected as Chinese purchasing managers index (PMI) data shows varied levels of activity in the services and manufacturing sectors.
The beginning of the fourth quarter brings hopes of a positive start after a difficult third quarter, which saw declines in stocks, bonds, and non-dollar currencies. However, concerns loom over China’s markets as they remain closed for the Golden Week holiday. Worries persist over the imploding property sector, capital outflows, currency pressure, and a struggling economy.
Despite these challenges, the International Monetary Fund (IMF) remains optimistic about the positive effects of Beijing’s policy support. Nevertheless, the IMF notes that growth needs to re-accelerate to maintain stability.
On Monday, Australia, Japan, and Indonesia are set to release their PMI reports. Additionally, Japan will unveil its “tankan” survey of business sentiment. These reports will provide further insights into the state of the Asian economies and their respective business environments.
In the week ahead, multiple central banks, including Australia, India, and New Zealand, are expected to announce policy decisions, while inflation data is anticipated from several countries in the region. The Reserve Bank of Australia, Reserve Bank of New Zealand, and Reserve Bank of India are likely to keep their key interest rates on hold.
Investors, meanwhile, are eagerly anticipating the possibility of one final interest rate hike by the Reserve Bank of Australia this year, as other central banks may have completed their rate-raising cycles.
Key developments in the coming days will include manufacturing PMIs from Australia, Japan, and Indonesia, Japan’s tankan survey, and the Bank of Japan’s policy meeting summary of opinions. These updates will offer crucial insights into Asia’s economic standing and provide investors with valuable information for strategic decision-making.
In summary, while hopes of a positive start to the fourth quarter are on the horizon for Asian markets following the U.S. Congress deal, mixed sentiment looms due to varied levels of activity in China’s services and manufacturing sectors. The week ahead will bring further clarity with the release of PMI reports, central bank policy decisions, and other key economic indicators.