Asian equities opened the week higher following the record close in S&P 500 last week. The Nikkei was also lifted by BoJ governor Iwata's reiteration on the pledge on easing policy. Iwata noted over the weekend that the central bank would continue the bond purchases until meeting its 2% inflation target.The yen weakened broadly on risk appetite. But, strength in emerging markets is limited so far. The Bank of International Settlements warned in a report that China has more than tripled the foreign loans to companies and banks to $900b in the last five years. And, that "may give rise to substantial financial stability risks associated with dollar funding".
The week ahead is rather eventful. Three central banks will meet including the Fed, RBNZ, and BOJ. All are expected to keep policies unchanged. Recent data showed that labor market recovered slowed ahead of the government shutdown in US, and there will also be another round of fiscal negotiation in near term. It's believed that Fed would not taper the asset purchase this year and markets would look for some affirmation of this view in the FOMC statement. In addition to the central bank meetings, focus will also be on the US ADP job report as well as the ISM manufacturing index.
Here are some events to note:
- Monday: US Industrial production, pending home sales
- Tuesday: Japan household spending, unemployment, retail sales; German Gfk consumer sentiment; Canada IPPI, RMPI; US retail sales, PPI, consumer confidence
- Wednesday: Japan industrial production; German CPI, unemployment; Spanish GDP; Swiss KOF; US ADP employment; CPI; FOMC rate decision
- Thursday: RBNZ rate decision; Australia building approvals, import prices; BoJ rate decision; Eurozone CPI; Canada GDP; US jobless claims, Chicago PMI
- Friday: Australia PPI; China manufacturing PMI; Swiss SVME PMI; UK manufacturing PMI; US ISM manufacturing