Asian stocks start cautiously, Chinese data eyeing By Reuters

By Wayne Cole

SYDNEY (Reuters) – Asian stock markets made a cautious start to the week on Monday ahead of a series of Chinese data that could confirm a slowdown in the giant economy as much of the world struggles to stem the spread of the Delta variant COVID -19 with vaccines.

Retail sales, industrial production and urban investment figures are expected to show a slight decline in activity in China in July, a trend likely to be exacerbated by the recent tightening of restrictions on coronaviruses.

There was some uncertainty about the possible geopolitical implications of the sudden collapse of the Afghan government and what it means for political stability in the region.

“Asia’s low vaccination rates and low tolerance for community spread suggest that this is the region most economically at risk for the Delta variant,” said JPMorgan (NYSE 🙂 economist Bruce Kasman.

“China is in the process of removing political support, which seems likely to dampen the growth of domestic demand and weigh on regional performance until the end of the year,” he added. “With these slowdowns that have accumulated in recent weeks, we have lowered regional growth forecasts to 2H21.”

The largest MSCI index of Asia-Pacific stocks outside of Japan was stable at the start of trading, after hitting its lowest level of the year last month.

fell 1.2%, although economic growth rattled forecasts for the June quarter.

Futures on the Nasdaq and were both down 0.1% at the start of Asian action.

Wall Street set new records last week even as a survey showed U.S. consumer confidence plummeted to its lowest since 2011 amid fears from Delta.

The dismal report pulled 10-year Treasury yields down 8 basis points on Friday to leave them at 1.28%, erasing a week of steady increases. [US/]

It also erased a week of gains for the dollar, returning it to 92.517 against a basket of currencies from an almost five-month high at 93.195.

The euro rebounded to $ 1.1797 and moved away from major chart support at $ 1.1740, while the dollar retreated to 109.51 yen from a high of 110.79.

Kim Mundy, a senior currency strategist at the CBA, argued that the dollar could recover this week if the minutes of the Federal Reserve’s latest policy meeting confirmed a hawkish turn on reduction.

The minutes are released on Wednesday as Fed Chairman Jerome Powell speaks on Tuesday.

“We expect the FOMC to announce that it will decrease its monthly asset purchases in September if the August payroll is strong,” Mundy said.

“We believe that a tapering announcement next month is not widely expected, so if the minutes show that the FOMC has discussed the possibility of announcing a tapering as early as September, we expect the dollar to rebound. “

In the commodities markets, gold extended its rebound to $ 1,779 following a sudden drop in stop-losses to $ 1,684 early last week. [GOL/]

Oil prices eased early in the trade, in part because coronavirus-related travel restrictions would hurt demand, especially in China. [O/R]

fell 28 cents to $ 70.31 a barrel, while it lost 31 cents to $ 68.13.