- Markets remain downbeat in Asia as China data flag concerns about slowing economic recovery in regional leader.
- China trade numbers, likely political tensions with Asian and Western peers flag economic fears.
- Cautious mood ahead of top-tier inflation data, downbeat wage growth in Japan also weigh on sentiment.
- Risk catalysts eyed for clear directions ahead of front-tier statistics.
The risk profile remains sour in the Asia-Pacific zone during early Tuesday as the region’s leader China roils the mood with downbeat details of foreign trade. Adding strength to the risk-off mood could be headlines surrounding Beijing's economic tension with Japan, India and the US, as well as economic strains due to the typhoon Doksuri.
Against this backdrop, the MSCI’s index of Asia-Pacific shares outside Japan drops to the lowest level in two weeks while posting a nearly 1.0% intraday fall whereas Japan’s Nikkei 225 prints mild gains by the press time.
China’s headline Trade Balance improves in July but the details suggest deteriorating Imports and Exports for the said month, suggesting the economic challenges for the Dragon Nation which already suffers from geopolitical woes. That said, India bans drone makers from using Chinese equipment after stopping the imported laptops and computers previously. On the same line, Japan’s Taro Aso, Vice President of the Liberal Democratic Party (LDP), flags turbulence surrounding Taiwan.
With this, Chinese equities edge lower and drag shares from Australia and New Zealand. It’s worth noting that Australia’s ASX 200 prints mild gains as downbeat Aussie sentiment figures back the dovish concerns about the Reserve Bank of Australia (RBA) and defend the equity bulls in Canberra.
Further, stocks in India remain dicey as traders await this week’s monetary policy announcements of the Reserve Bank of India (RBI).
Elsewhere, mixed comments from the policymakers of the Federal Reserve (Fed) join indecision at the Bank of England (BoE), the Bank of Japan (BoJ) and the European Central Bank (ECB) to also weigh on the market sentiment and drown the S&P500 Futures. The same, however, fails to impress the bond yields as the US 10-year Treasury bond yields remain depressed at around 4.04% by the press time.