SYDNEY- Asian shares were enjoying a relief rally on Monday as record highs on Wall Street and policy easing in China helped calm some of the recent jitters on global growth, though plenty of potential pitfalls lay ahead this week.
In the United States, inflation data could provide a scare ahead of testimony by Federal Reserve Chair Jerome Powell on Wednesday and Thursday, where markets will be hyper-sensitive to any talk of early tapering.
The earnings season also kicks off with JP Morgan, Goldman, Citigroup and Wells Fargo among those reporting.
China releases figures on economic growth, trade, retail sales and industrial output amid concerns they could underwhelm given the sudden easing in policy last week.
“Expectations around China’s outlook have soured over the past month as a result of some disappointing partial data made a lot worse by the optics of coming off peak growth from the pandemic recovery,” said Westpac analysts in a note.
“However, annual growth is still expected to be above 8.0 percent and, through the second half of 2022, the quarterly growth pulse should firm back to trend.”
For now, investors were happy that last week’s burst of bearishness had swung around in New York, sending Wall Street higher and tempering the bull run in bonds.
On Monday, MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.9 percent, after shedding 2.3 percent last week. – Reuters
