Mixed signs in Asian markets

Indexes in Asia and the Pacific followed a different direction in the first sessions of the stock market week, awaiting new monetary policy decisions from central banks in the region.

Specifically, in Japan the Nikkei increased by 0.84% ​​and ended at 26,153 points, while the Topix increased by 1.34% closing at 1,869 points.

Indices also moved slightly higher in mainland China, with the Shanghai Composite at +0.23% and 3,395 points, while the Shenzhen Composite rose 0.33% at 4,485 points, while in Hong Kong the Hang Seng closed with losses of around 0.5% to 21,752 units.

The Kospi in South Korea also followed a downward movement, with small losses of 0.2% at 2,301 points, while in Australia the ASX 200 finished with significant gains of 1.1% at 6,612 points.

It is noted that within the week the central banks in Australia and Malaysia are meeting, with investors expecting new announcements of interest rate increases.

As Credit Suisse’s Dan Finman notes, markets generally appear to have priced in the size of the Fed’s next rate hikes, but the “very high downside risk” suggests a rally is unlikely.

“I think the worst is behind us. We’ll probably bottom out, with some room for further declines from where we are, but I think the difficulties of the first half won’t repeat themselves on the same scale in the second,” he told CNBC.

In corporate news, Chinese real estate firm Shimao missed a $1 billion bond interest and principal payment, something that has happened to other real estate firms recently.

It is noted that the US market will remain closed today due to the 4th of July holiday.

On the macroeconomic front, results for China’s service sector activity and South Korea’s inflation data are expected later in the week.

Elsewhere, the US dollar index, which tracks the US currency against a basket of currencies, was essentially unchanged at 105.143.

“The possibility of a 75bp increase in the June and July meetings keeps the dollar strong in the short term, but they remain in our base scenario that the dollar will weaken later in the year,” notes Richard Yetsenga, chief economist at ANZ .

The Japanese yen is trading at 135.14 yen per dollar, having strengthened from a dip as low as 137 per dollar last week. The Australian dollar is at 0.6806 against the US dollar, recovering from a dip below 0.679 recently.

Finally, oil is moving slightly higher in the $110 area, with around +0.5% for both Brent ($112.25) and WTI ($108.97).