Trades mixed, investors await Chinese/ Indian CPI data

• Asian stock markets trade mixed following the US mixed results.
• The Reserve Bank of India (RBI) is expected to hold interest rates at 6.5% at its upcoming policy meeting.
• The lack of specifics about an additional stimulus plan from the Chinese government has dampened investor expectations.
• Investors await the Chinese CPI YoY, the Indian CPI for July.

Asian stock markets trade mixed on Monday following mixed US employment data. That said, the Nonfarm Payrolls in the US rose 187,000 in July, worse than expected by 200,000. The figures in June were revised down to 185,000. This marked the lowest reading since December 2020. Meanwhile, the Unemployment Rate fell to 3.5% from 3.6%. The Average Hourly Earnings came in at 4.4%, higher than the market estimate of 4.2%. Market participants will keep an eye on the inflation data from China and India. Also, the Reserve Bank of India’s (RBI) interest rate decision on Thursday.

At press time, the Nikkei gains 0.13%, Shanghai drops 0.56%, Hang Sang drops 0.02%, the Shenzhen Component Index falls 0.72%, and the Kospi Index is down 0.68%.

The NIFTY 50, the National Stock Exchange of India, gains 0.35%. The Reserve Bank of India (RBI) is widely anticipated to hold the key interest rate at 6.5% for the third consecutive time at its upcoming monetary policy meeting scheduled for Thursday. Also, the Indian Consumer Price Index (CPI) for July and Industrial Production for June will be released on Friday. It’s worth noting that the RBI started hiking in May 2022 and has maintained the repo rate at 6.5% since February.

In China, the country’s top economic committees announced on Friday that the government will implement additional measures to boost consumer expenditure and enhance local liquidity. However, officials once again provided no significant details on the planned stimulus. The government’s lack of specific plans has dampened investor expectations. Additionally, China’s Caixin Services PMI climbed to 54.1 in July from 53.9 prior, better than the market consensus of 52.5.

On the other hand, exacerbated tensions between the US and China could exert pressure in the region. According to Reuters, US President Joe Biden is expected to issue an executive order this week to restrict US investments in China in the high-tech sector, artificial intelligence, semiconductors, and quantum computing.

Moving on, market participants will monitor the headlines surrounding the US-China relationship. The key focus this week will be the Chinese CPI YoY, the Indian Consumer Price Index (CPI) for July, and Industrial Production for June, due on Friday. The data could give direction to riskier assets like Gold, equities, the AUD/USD, etc.