Federal Reserve, economic data, inflation, currencies, oil

SINGAPORE – Shares in the Asia-Pacific region fell on Monday ahead of an important week in the United States

Japan’s Nikkei 225 fell 0.84% ​​and Topix lost 0.72%.

In South Korea, the Kospi is partially down, while the Kosdaq is down 0.75%.

With the US FOMC meeting in focus, Asian assets are likely to trade mixed in the first part of the week with stagflation risks remaining at the fore.

Venkateswaran Lavanya

Economist, Mizuho Bank

Australia’s S&P/ASX 200 is hovering around the flatline.

Hong Kong’s Hang Seng fell 0.37%, and Hang Seng Tech lost about 1%.

Mainland China markets also fell. The Shanghai Composite Index slipped 0.11%, and the Shenzhen Composite Index fell 0.27%.

The Financial Times reported that China plans to sort Chinese companies listed in the US into three groups depending on the sensitivity of the data the companies hold to prevent delisting.

MSCI’s broadest index of Asia Pacific shares outside Japan was slightly negative.

Inflation data in Singapore is due to be released on Monday. Economists polled by Reuters expect the core CPI for June to rise 4.2% from a year ago. Prices rose 3.6% in May.

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Over the weekend, the World Health Organization declared monkeypox a global health emergency. The organization’s emergency committee was unable to reach a consensus, but WHO chief Tedros Adhanom Ghebreyesus made the decision to issue a red alert, though he said it was unlikely to disrupt global trade or travel for the time being.

Later this week, all eyes will be on the Federal Reserve’s interest rate decision and US Q2 GDP data release.

Expectations for a 75 basis point move in July stood at 78.7%, according to CME Group’s FedWatch tool.

“With focus on the US Federal Open Market Committee meeting, Asian assets are likely to trade mixed in the first part of the week with stagflation risks remaining at the fore,” Venkateswaran Lavanya, an economist at Mizuho Bank, wrote in a note on Monday.

In the Asia-Pacific region, advance estimates of South Korea’s gross domestic product will be released on Tuesday and Australia will release inflation data on Wednesday.

Currency and oil

The US Dollar Index, which measures the greenback against a basket of peers, was at 106,823.

The Japanese yen was trading at 136.46 per dollar, after strengthening sharply late last week. The Australian dollar fell 0.52% to $0.6888, just below the $0.69 level.

Oil futures gave up earlier gains in Asia morning. The price of US crude fell 0.2 percent to $ 94.51 a barrel, while Brent crude settled at $103.15 a barrel.

CNBC’s Patti Doom and Spencer Kimball contributed to this report.

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