SYDNEY- Share markets were broadly firmer across Asia on Monday as a holiday in Japan removed one source of recent volatility, and investors looked ahead to major US and Chinese economic data for an update on global growth prospects.
Key for the Federal Reserve will be US consumer prices on Wednesday where economists look for rises of 0.2 percent in both the headline and core, with the annual core slowing a tick to 3.2 percent .
“That would likely bolster the Fed’s confidence that disinflation is ongoing, allowing for a rate cut in September, but a core run-rate still above target should also speak against a larger 50bp cut or an intra-meeting cut,” said analysts at Barclays in a note.
“Moreover, we expect a robust 0.8 percent m/m increase in headline retail sales, pointing to continued resilience in the engine of the economy, the consumer, on the back of solid income and wealth fundamentals.”
As well as July retail sales, there is data on industrial output and housing starts, along with several surveys on regional manufacturing and consumer sentiment.
The futures market currently implies a 49 percent chance of the Fed cutting by 50 basis points in September, though that is down from 100 percent a week ago when Japanese equities went into free fall.
Nikkei futures traded at 35,570 compared with a cash close of 35,025 though they are not quite back at where they were before last week’s plunge.
MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.3 percent , led by a 1.5 percent bounce in Taiwan Chinese blue chips held steady.
EUROSTOXX 50 futures rose 0.5 percent and FTSE futures 0.4 percent . S&P 500 futures and Nasdaq futures both added 0.1 percent in thin trading. So far, around 91 percent of the S&P 500 have reported earnings and 78 percent of those have beaten the Street.
Results from Walmart and Home Depot this week will also offer a snapshot on how US consumers are holding up.
