A look at the day ahead in European and global markets from Tom
Westbrook
Asia carried on Wall Street’s overnight rally but with less
enthusiasm while headline news from the Middle East offered
little sign of the deadly conflict calming down.
U.S. and European equity futures were flat,
while MSCI’s broadest index of Asia-Pacific stocks outside Japan
rose 0.7%.
British wages data, U.S. retail sales figures and corporate
earnings are the calendar items in focus.
On the diplomatic front, Russian President Vladimir Putin
arrived in Beijing to showcase his “no-limits” partnership with
China, while U.S. President Joe Biden is set to visit Israel.
Investors see risk that Israel’s escalating retaliation
against Hamas could draw Iran into battle, with global
consequences, but have so far mostly limited their display of
anxiety to buying oil futures and selling Israeli assets.
Tel Aviv shares are down nearly 9% for the month
and the shekel has weakened beyond the psychological
4-per-dollar mark.
Other safety plays, however, have started to unwind with the
yen ticking back toward 150-to-the-dollar and gold
nudging off a three-week high.
In China, where gross domestic product data is due on
Wednesday, Country Garden was on the brink of a
possible offshore default.
Tuesday is the end of a 30-day grace period for the
country’s largest developer on a $15 million overdue offshore
coupon payment, and missing its obligation would highlight the
depth of the confidence crisis gripping the sector.
Reuters reported China’s civil servants and state-enterprise
employees face tighter travel constraints, as Beijing wages a
campaign against foreign influence.
Tuesday also brought mixed signals from Australia and New
Zealand, with surprisingly hawkish minutes from this month’s
Reserve Bank of Australia meeting lifting the Aussie dollar
a little.
The kiwi slipped after a slowdown in inflation
signalled further hikes there are now even less likely.
Key developments that could influence markets on Tuesday:
– Economic data: British wages, U.S. retail sales
– Corporate results: Goldman Sachs, Bank of America
, Johnson & Johnson
(Reporting by Tom Westbrook; Editing by Edmund Klamann)
