Asian Stock Market: Tracks softer S&P500 Futures, yields as weak China data joins US default concerns

• Asian equities trade mixed amid broadly cautious mood, softer China statistics.
• Sluggish Oil price, upbeat Wall Street fails to impress equity buyers ahead of debt ceiling talks.
• US policymakers remain at loggerheads before the key negotiations, suggesting fears of “catastrophic” default.
• Central bankers’ hesitance in promoting higher rates, scheduling of US debt ceiling talks favors cautious optimism.

Markets in the Asia-Pacific zone grind lower as fears of the US default joins downbeat China data during Tuesday’s sluggish session.

While portraying the mood, MSCI’s Index of Asia-Pacific shares outside Japan rises 0.60% intraday whereas Japan’s Nikkei 225 rise 0.80% amid Bank of Japan (BoJ) policymakers’ defense of the easy money policy. However, stocks from Australia, New Zealand and China print mild losses whereas those from India lack clear directions.

Late on Monday, market sentiment improved as the White House announced a meeting between President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy to overcome the looming US default. The same allowed Wall Street to end the day in positive territory. However, the latest comments from United States House Speaker Kevin McCarthy saying, “I don’t think we’re in a good place,” seem to put a floor under the US Dollar price, via fears of deadlock on the US debt ceiling extension as Republicans may stick to their demand.

Elsewhere, China Industrial Production grew 5.9% for April versus 10.9% expected and 3.9% prior whereas Retail Sales rose 18.4% YoY from 10.6% prior and 21.0% market forecasts.

It’s worth noting that the Reserve Bank of Australia’s (RBA) latest monetary policy meeting minutes disappointed Australian traders as it cited easing inflation pressure and showed the policymakers’ concerns about the sluggish productivity growth.

On a broader page, S&P500 Futures print mild losses while the US Treasury bond yields remain pressured which in turn shows the market’s indecision and awaits the important data/events for clear directions.

Moving on, trades will pay attention to the US Retail Sales for April, expected at 0.7% MoM versus -0.6% prior, for immediate directions. However, the US policymakers’ ability to offer a positive surprise to the markets, via either a strong solution to avoid the default or a basic guide to extend the debt ceiling, will be interesting to watch for a clear guide.

Also read: Forex Today: US Dollar corrects lower amid cautious markets