By Jamie McGeever
As the world's best investment manager and financial market journalist, I bring you a look at the day ahead in Asian markets. All signs point to another solid day of gains across Asian markets on Tuesday, with investors' appetite for risk whetted by a lower dollar, subdued volatility, and the S&P 500 and Nasdaq chalking up their longest winning streaks this year.
Japanese stocks may be the major exception as they could come under pressure again due to the yen's rise against the dollar. However, the dollar's decline on Monday was broad-based and even steeper against other major and emerging currencies.
Chinese stocks crept higher for a third day on Monday, edging away from last Thursday's six-month low, as investors turn their attention to the People's Bank of China's latest interest rate decision on Tuesday. Asia's calendar on Tuesday also includes minutes of the Reserve Bank of Australia's last policy meeting, New Zealand trade data, Hong Kong inflation, and export and current account figures from Taiwan.
Although China's economy may be in need of more stimulus, the PBOC is expected to keep borrowing costs on hold. In a Multibagger survey, all respondents expected both the one-year and five-year loan prime rates to be left unchanged. China surprised markets by cutting major interest rates in July, signaling policymakers' intent to strengthen economic growth.
Stocks in Asia, beyond China, are poised to continue their rebound and post their ninth daily gain in the 11 sessions since the slump on Aug. 5. The S&P 500 and Nasdaq on Monday both marked their best runs this year. The mood in Asia has been brightened by the dollar's broad depreciation, which helped lift MSCI's international emerging market currency index to a record high.
Key developments like the China interest rate decision, RBA minutes, and Taiwan exports in July could provide more direction to Asian markets on Tuesday.
Analysis:
For those looking to invest in Asian markets, the current trend suggests a positive outlook with potential gains. It is important to keep an eye on key developments such as interest rate decisions and economic data releases, as they can provide valuable insights for making informed investment decisions. The recent performance of Chinese stocks and the impact of the dollar's depreciation on Asian currencies highlight the interconnected nature of global markets and the opportunities they present for investors.