EQUITIES
Asia-Pacific markets traded mixed Monday as investors digesting economic data out of China. The Shanghai composite added 0.62%, while the Nikkei 225 in Japan rose 0.86%. Australian shares also eked out gains as the ASX 200 was up 0.32%.
South Korean shares, however, faltered as the KOSPI slipped 1.45%. Hong Kong shares also struggled for gains as the Hang Seng index fell 0.84%.
European stocks are expected to open higher on Monday. U.S. markets are closed for Martin Luther King Jr. Day.
OIL
Oil prices rose on Monday, as investors bet supply will remain tight amid restrained output by major producers with global demand unperturbed by the Omicron coronavirus variant.
The Brent now traded at $86.25 per barrel, hovering at its highest since Oct. 3, 2018. U.S. crude futures traded at $84.21 per barrel.
Overnight, the Brent futures ends at $86.06 a barrel, while the WTI crude oil prices closed to $83.82 per barrel.
CURRENCIES
The dollar clung to a late week bounce on Monday as investors braced for January's U.S. Federal Reserve meeting. The U.S. dollar traded higher at 95.171 against a basket of its peers, after last week climbing from levels near 94.87.
U.S. 10-year Treasury yields hovered near two-year highs hit in the previous week, and at 1.793% on Monday.
There are no policy-relevant economic data releases this week or any scheduled speeches from Fed officials. The market will be spared ahead of their Jan 25-26 policy meeting.
China surprised market with a benchmark cut. The central bank cut borrowing costs for medium-term loans for the first time since April 2020, defying market expectations.
GOLD
Gold prices were flat on Monday. Spot gold was up 0.12% to $1,820.30 per ounce, and the U.S. gold futures rose 0.17% at $1,819.50.
Spot silver added 0.4% to $23.01 an ounce, platinum was up 0.3% to $967.40, and palladium fell marginally to $1,877.00.
ECONOMIC OUTLOOK
Share markets were choppy on Monday as a slew of Chinese economic data confirmed the deadening effect of coronavirus restrictions on consumer spending, prompting Beijing to ease monetary policy.
Numbers from China’s NBS showed the Chinese economy grew by 8.1% in 2021, slightly below the market’s expectation for around 8.4% growth for the year. In the Q4, the GDP rose 4% from a year ago, topping a 3.6% increase. Industrial production also rose and beat expectations, but retail sales had more muted growth.
China's central bank also surprised by cutting some key lending rates. China lowered a key interest rate for the first time since the peak of the pandemic in 2020 as a property-market slump and repeated virus outbreaks dampened the nation’s growth outlook. The People’s Bank of China cut the rate on its one-year policy loans by 10 basis points to 2.85%, while net injecting 200 billion yuan ($31.5 billion) of medium-term cash into the financial system.
In the week ahead, investors will be keeping an eye on the latest Eurogroup meeting of finance ministers in Brussels. Data releases in Europe on Monday include Italy consumer price data for December and final inflation data for the eurozone in December. Meanwhile, a Bank of Japan policy meeting will concludes on Tuesday, British inflation data on Wednesday and Australian jobs figures on Thursday are also in view as traders gauge the global policy outlook.
In Q4 earnings reports, companies reporting this week include Goldman Sachs, BofA, Morgan Stanley and Netflix.
