Asia Starts the Week on a Quiet Note

The return of China’s markets after the Lunar New Year break usually attracts attention due to China’s significant role in global trade and economics. However, the response has been subdued, likely influenced by the US holiday and a generally calm week for US data.

Although increased activity in China during the Lunar New Year could offer insights into consumer sentiment and economic health, its impact on local and global markets may be limited.

While this week appears quiet in terms of US economic events, it’s important to remember that calm periods can sometimes lead to unexpected developments. However, today seems exceptionally tranquil.

Yet, there’s a heightened risk of escalation in Gaza, with expectations of an Israeli offensive in Rafah. Simultaneously, attention is on Russia, where the government is suppressing public mourning for Aleksei Navalny, whose death is viewed by many as an act of tyranny.

Key events this week include Nvidia’s earnings release and the publication of the January FOMC minutes. While these minutes may shed light on the Fed’s discussions and future policies, the market sentiment has shifted away from anticipating near-term rate cuts.

Despite this adjustment, equities have remained stable, indicating confidence unless doubts arise regarding the expected rate cuts.

Discussions around the Fed’s quantitative tightening (QT) tapering are also relevant, with traders seeking clarity on the timing and parameters. Any hints in the FOMC minutes could affect market expectations.

Other notable events include existing home sales data, flash PMI releases for February, and updates on the Ifo survey in Germany and Israel’s fourth-quarter GDP. These indicators offer insights into economic conditions amid ongoing challenges and tensions.

While the economic calendar may seem quiet, geopolitical developments and surprises in data releases could still prompt market volatility and influence investor sentiment.

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