Asia Pacific stocks were mixed Monday morning. Benchmark Treasuries steadied ahead of a slew of central bank policy decisions in the week ahead, including the U.S. Federal Reserve.
China’s Shanghai Composite was down 0.56% by 11:12 PM ET (3:12 AM GMT) and the Shenzhen Component Equal Weighted slid 1.70%. Data released earlier in the day said that industrial production grew 35.1% year-on-year in February, above the 30% growth in forecasts prepared by Investing.com and the previously recorded 7.3% growth. Retail sales also soared 33.8% year-on-year, against the predicted 32% growth and the previously recorded 4.6% growth.
The unemployment rate was at 5.5%, higher than the previously recorded 5.2%.
Hong Kong’s Hang Seng Index gained 0.43%, even as the city continues to grapple with a fresh COVID-19 outbreak linked to a gym in Sai Ying Pun. Xiaomi (OTC:XIACF) Corp.'s (HK:1810) Hong Kong shares surged almost 10% after the U.S. temporarily lifted its ban on the company, while Tencent Holdings (OTC:TCEHY) Ltd.'s (HK:0700) Hong Kong shares saw losses as the company potentially faces increased regulatory supervision.
Japan’s Nikkei 225 was up 0.26%, while South Korea’s KOSPI edged down 0.13%.
In Australia, the ASX 200 edged up 0.15%.
Ten-year Treasury yields remained around one-year highs as a $1.9 trillion stimulus package was signed into law in the U.S. on Friday and the global COVID-19 vaccine rollout continues, with increasing hopes for an economic recovery from COVID-19 keeping inflation risk in the spotlight. Australian and New Zealand ten-year rates also rose on Monday.
Fed Charman Jerome Powell will likely reaffirm his no-tightening policy stance when the central bank hands down its policy decision on Wednesday. Treasury Secretary Janet Yellen added that U.S. inflation risks remain subdued despite the Biden administration stimulus. A strong recovery from the COVID-19 recession is reportedly likely to prompt Powell and his colleagues to lift interest rates in 2023, but this increase is not expected to be reflected in their forecasts this week.
“Despite elevated valuations across both equities and credit, it’s very hard not to be positive on risk assets in this environment … yet the change of pace in markets last week maybe also suggests a lot is priced already,” JPMorgan (NYSE:JPM) Asset Management global multi-asset strategist Patrik Schowitz said in a note.
The Fed decision is one of a few due from central banks globally over the course of the week. The Bank of England is widely expected to leave monetary policy unchanged when it hands down its policy decision on Thursday. In Asia, the Bank of Japan hands down its decision on Friday.
On the COVID-19 front, rising concerns about the reported side effects from the vaccine developed by AstraZeneca (NASDAQ:AZN) PLC and the University of Oxford led several countries, including Ireland and the Netherlands, to suspend its use. Elsewhere in Europe, Italy will re-enter lockdown from Monday to curb a resurgence in COVID-19 cases.
In cryptocurrencies, bitcoin topped a record $61,000 over the weekend but had eased to trade around the $60,000 mark.
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