Asia
Markets in the Asia-Pacific began the weak on an uncertain footing, with a mixed performance across the region’s biggest markets. Japan’s Nikkei, which was sold off heavily last week amid a strengthening yen, was modestly lower on Monday morning. Hong Kong’s Hang Seng, however, lost nearly 700 points or 2.28%, dropping back below the 30,000 points level that was breached at the start of the year, as fears over a global trade war rattled investors.
Chinese equities managed to remain in positive territory though.
The Chinese government set a 6.5% target for economic growth this year, which was announced at the start of the People’s National Congress on Monday. According to the Caixin PMI survey, the country’s services sector is still expanding healthily – although at 54.2 the reading was a touch lower than forecasts and below the previous month.
Later in the week sees the Bank of Japan make its monthly monetary policy decision. Investors are expecting more clarity on Governor Kuroda’s comments about when monetary policy will start to be tightened.
Europe
The uncertain outcome of the Italian General Election, with a hung parliament seen as the most likely outcome, weighed on the euro on Monday morning. The euro softened against the dollar but this should be seen in the context of a rise in the euro from near parity against the greenback to around 1.20 today. The European Central Bank meeting on Thursday is also likely to support the euro if Mario Draghi continues to rate the recovery in the eurozone economy.
Anti-euro parties have made ground in Italy but political deadlock works against the prospect of significant change. The country’s main index, the FTSE MIB, was off nearly 1% on Monday morning. But German and French exchanges took the softening euro as a trigger to move modestly higher.
The FTSE 100 started the week higher, moving away from the 7,000 points level that was threatened at the end of last week. Housebuilders such as Persimmon (PSN) were in the ascendant on Monday after last week’s updates. The UK’s services sector expanded more than forecast in February.
North America
The week’s highlight is Friday’s US jobs data, which last month triggered a sharp selloff in global markets. The forecast is for the US economy to have added 205,000 jobs in February. The ISM Services data will also be in view today.
Canada’s central bank meets this week but interest rates are expected to remain at 1.25%. The country’s economy is expected to have added 21,000 jobs in February but the unemployment rate is forecast to remain at 5.9%.
The Dow Jones is expected to open around 80 points lower on Monday after a volatile ride last week.
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