People’s Bank of China Governor Yi Gang said China could phase out currency intervention by gradually reducing the volume and frequency of its forays into the market, underscoring Beijing’s resolve to boost the yuan’s global presence .
Yi also said the central bank would try to get real interest rates slightly below the potential growth rate.
Meanwhile, in Japan on Saturday, PM Kishida was bundled up by bodyguards for protection after a man threw him during an election campaign at a fishing port in the west of the country. It was a horrifying reminder of the assassination of former PM Shinzo Abe last year.
Monday’s data is expected to show that wholesale price inflation in India almost halved to 1.87% annual rate in March from 3.85%. This was 16% less than a year ago.
Investors expect data on Tuesday to show that China’s GDP growth accelerated sharply in the first quarter after COVID-19 lockdown restrictions were lifted, up from 4.0% a year earlier and 2.9% in the past three months.
Don’t be surprised by a reversal – China’s Economic Surprise Index is at its highest level in 17 years.
The broader tone this week will be set by investors’ stance on the US banking crisis. or shock. or blip. A solid recovery in equities and a fall in market volatility gauges suggest that investors are bullish.
Some big US banks reported strong Q1 earnings on Friday — shares of JPMorgan rose 7.5% — fueling hopes that bold and swift action from policymakers a month ago has worked.
The S&P 500 and MSCI World Index have recovered nearly 10% from March lows, while euro zone stocks hit their highest in 22 years on Friday.
But carelessness would be dangerous. As Morgan Stanley analysts noted, US credit growth is shrinking, credit availability to small businesses fell at the fastest rate in 20 years in March, and interest costs are at a 15-year high.
Three key developments that could provide more direction to the markets on Monday are G7 Foreign Ministers Summit in Japan, India WPI Inflation (March) and ECB’s Christine Lagarde speaks in New York. – Reuters
