Written by Jamie McGeever
(Reuters) – Future outlook for the Asian market.
Global market attention on Monday is likely to focus on the dollar, particularly its performance against emerging market currencies, after US President-elect Donald Trump issued a warning to so-called BRICS countries over the weekend. .
In a social media post on Saturday, President Trump warned the BRICS countries (Brazil, Russia, India, China and South Africa) not to create a new currency or support another currency to replace the US dollar. promised to do so or face 100% sanctions. Tariff.
This comes after President Trump had already last week proposed steep tariffs on China, Mexico and Canada, the countries with the largest US trade deficits, adding further volatility to global currency markets. .
It will be interesting to see how the dollar moves on Monday. The stock's eight-week winning streak ended last week, marking its steepest weekly decline since mid-August, as expectations for a U.S. interest rate cut cooled and Treasury yields fell.
But much of the dollar's decline last week was driven by its weakness against the euro and yen. It has held up quite well against other G10 currencies, especially the Canadian dollar, especially emerging market and Asian currencies.
As the final month of the year begins, sentiment towards emerging markets remains broadly subdued. Outflows from emerging market bond funds remain high, analysts say. barclays (LON:) Emerging market hard currency bond funds posted their second biggest outflow this year last week.
But there are more encouraging signs coming out of China that the government's package of stimulus and support measures in recent months may be starting to bear fruit.
New home prices in China rose 2.40% in November compared to the same month last year, compared with 2.08% in October, according to a private survey on Sunday. And on Saturday, China's official Purchasing Managers Index data showed factory activity expanded modestly in November for the second month in a row and at the fastest pace in seven months.
Is there light at the end of the tunnel for China's domestic economy? Policymakers in Beijing and China bulls will certainly be hoping so, as President Trump ramps up his trade threats ahead of next month's inauguration.
Monday's Asian economic calendar will see the release of a number of manufacturing PMI reports, including China's “unofficial” Caixin manufacturing PMI data for November. Will it reinforce the modest signs of encouragement from the weekend's “official” numbers?
Economists polled by Reuters expected the economy to expand at 50.5, up from 50.3 in October and the fastest pace of expansion since June.
Other regional highlights on Monday include the latest retail sales data from Australia and inflation statistics from Indonesia. Consumer prices rose at an annual rate of 1.50% in November, slowing from 1.71% the previous month, according to a Reuters poll. This is the lowest annual inflation rate since June 2021.
Here are the key trends that could give further direction to the market on Monday:
– China Caixin Manufacturing PMI (November)
– Australian retail sales (November)
– Indonesian inflation (November)
