The Asia-Pacific markets experienced a sluggish session on Tuesday as fears of a US default and downbeat China data weighed on investor sentiment. MSCI’s Index of Asia-Pacific shares outside Japan rose 0.60% intraday, while Japan’s Nikkei 225 rose 0.80% as Bank of Japan policymakers defended the easy money policy.
However, stocks from Australia, New Zealand, and China recorded mild losses, and those from India lacked clear directions.
Late on Monday, the announcement of a meeting between President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy helped improve market sentiment, allowing Wall Street to end the day positively.
However, recent comments from McCarthy stating, “I don’t think we’re in a good place,” have raised fears of deadlock on the US debt ceiling extension, potentially putting a floor under the US dollar price.
In China, industrial production grew 5.9% in April versus the expected 10.9%, and retail sales rose 18.4% YoY from 10.6% prior and 21.0% market forecasts.
Meanwhile, the Reserve Bank of Australia’s latest monetary policy meeting minutes cited easing inflation pressure and policymakers’ concerns about sluggish productivity growth, disappointing Australian traders.
Looking ahead, trades will be paying attention to the US retail sales data for April, expected at 0.7% MoM versus -0.6% prior, for immediate directions.
However, the markets remain indecisive, with S&P 500 futures recording mild losses while US Treasury bond yields remain under pressure. Investors await significant data and events for clear directions.
Overall, the Asia-Pacific markets grind lower as the US default fears and downbeat China data continue to dampen investor sentiment.
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