Morning Bid: The curtain falls on a quarter to forget.

A man walks past an electronic monitor displaying Japan's Nikkei stock average and recent movements outside a bank in Tokyo.

A man walks past an electronic monitor displaying Japan’s Nikkei stock average and recent movements outside a bank in Tokyo on June 5, 2023.Reuters/Issei Kato/File photo, license rights acquired

Sept. 29 (Reuters) – Financial markets columnist Jamie McGeever looks at the future of Asian markets.

Investors in Asia head into the final trading day of a tough quarter in a slightly better frame of mind following a much-needed recovery in global sentiment and risk assets on Thursday, but the day saw top-level gains from Japan Economic indicators are in full swing.

Japan’s retail sales, industrial production, consumer confidence and Tokyo’s inflation statistics lead Friday’s regional calendar, including Australian credit and lending statistics and Thailand’s manufacturing and current account data. is also included.

But the rapidly evolving story of Evergrande makes for fascinating reading, and investors won’t be able to completely switch off over the weekend.

In addition, China’s manufacturing and service sector purchasing managers’ index reports (official and unofficial) for September will be released on Sunday. After that, the Chinese market will be closed for the Golden Week holiday.

It’s been a tough few weeks and a tough quarter.

The MSCI World Stock Index rose for the first time in 10 days on Thursday, ending its longest losing streak since November 2011. If it doesn’t rise 4% on Friday, it will record its first quarterly loss in a year.

The MSCI Asia index excluding Japan fared even worse. The company is headed for a 5% decline, its second consecutive quarterly loss and seventh of the past nine quarters.

Other Asia-related statistics for the quarter show a similar story.

The yen has fallen for three consecutive quarters, and 10 of the past 11. Hong Kong’s property index has fallen for three quarters, falling 17% in the third quarter and is on track to fall 30% so far this year, making it the worst year since 2008. And Chinese stocks fell for two consecutive quarters for the first time since 2019.

The factors are now well known: rising U.S. interest rates, soaring U.S. Treasury yields, a strong dollar appreciation, as well as China’s chronic underperformance, tight financial conditions, and growing concerns about the global economy. be.

Some of these conditions can be extended and the darkness overcooked. Would it be a complete surprise to see a partial recovery in risk appetite at the beginning of the fourth quarter and a reversal of many of these trades?

Thursday’s market movements show that nothing moves in a straight line. Although the 10-year Treasury yield hit a new intraday high, U.S. yields fell across the curve, oil and the dollar recorded notable declines, and stocks finally surged.

The International Monetary Fund said on Thursday that China’s economy is showing signs of stabilization and is confident that growth can accelerate if it takes steps to rebalance growth from investment to consumer spending.

In the foreign exchange market on Thursday, the renminbi hit a two-week high, the yen moved slightly away from the 150 yen level to the dollar, and the dollar index fell 0.5%, its biggest decline in about three weeks. Ta.

Here are the key developments that could give further direction to the market on Friday:

– Japan’s unemployment rate, retail sales, and industrial production (August)

– Japan’s Tokyo CPI inflation rate (August)

– Australian Loans, Credit (August)

Written by Jamie McGeever.Editing: Josie Kao

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The opinions expressed are those of the author. They do not necessarily reflect the views of Reuters News, which is based on principles of trust and is committed to integrity, independence and freedom from bias.

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Jamie McGeever has been a financial journalist since 1998, reporting from Brazil, Spain, New York and London, and is now back in the United States. He focuses on the economy, central banks, policy makers, and global markets, with a particular focus on foreign exchange and fixed income. Follow us on Twitter: @ReutersJami

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