Market Update: Asian Stocks Steady as Investors Brace for Most Important Week of the Year

Stock markets throughout Asia traded higher on Monday, as investors cautiously awaited a flurry of activity tied to geopolitics and monetary policy over the next five days.

Asian Stocks Trade Higher

Markets from Japan to Hong Kong were off to a positive start Monday. Japan’s 225-issue Nikkei gained 0.6% by the early afternoon session. The Topix Index, another Japanese benchmark, gained 0.5.%.

Over in Hong Kong, the Hang Seng Index rose 0.3% by midday local time. Mainland China’s CSI 300 Index was up 0.2%.

Futures trading was mixed for U.S. and European indexes, which pointed to a soft start to the day on Monday. Dow Jones mini futures were up 22 points at 12:29 a.m. ET. S&P 500 and Nasdaq minis were down slightly.

In commodities, U.S. oil futures traded below $66 a barrel after a Friday report showed another uptick in domestic drilling operations. ICE Brent futures also traded slightly lower ahead of a planned output hike from Saudi Arabia and other major producers.

In currencies, the U.S. dollar steadied against a basket of peers as investors awaited new developments on the economic and policy fronts. The dollar index (DXY) is down roughly 1.4% from last month’s high.

Most Important Week of the Year?

The wave of events over the next five days has Bank of America asking clients whether the world economy is headed for the most important week of the year. A tumultuous end to the G7 Summit in Quebec, where President Trump refused to endorse a joint communique, punctuated what is expected to be a volatile week for the financial markets.

Kit Juckes, a global strategist with Societe Generale SA, told investors not to be “lulled into a false sense of security” following Monday’s tepid start.

As President Trump prepares for his summit in Singapore Tuesday with North Korea’s Kim Jong-un, the U.S. Federal Reserve will begin its two-day policy meeting in Washington. The official rate announcement, which is scheduled the following afternoon, could provide important guidance on the pace and timing of future interest rate adjustments.

The European Central Bank (ECB) will also conclude policy talks later this week as policymakers ready for the gradual unwinding of their multi-year stimulus program. Although no change in policy is expected, ECB officials could spell out their plans for July and beyond.

Meanwhile, British Prime Minister Theresa May is expected to urge fellow Conservatives to unit behind the party ahead of a landmark vote on the EU withdrawal bill. Prime Minister May wants to deliver Brexit, but will have to contend with rebels within her own party who oppose her exit strategy.

Brexit Secretary David Davis is scheduled to arrive in Brussels on Monday for another round of neogtiations with EU counterpart Michael Barnier.

Featured image courtesy of Shutterstock. 

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi