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Negative leads and positive starts

Negative leads and positive starts

A cautious start to the trading week looks likely for Asia Pacific markets. European shares fell on Friday night after some weaker PMI data, and local futures fell with them as US markets were closed for a holiday. Currency markets are steady this morning, but falling crude oil prices may indicate a shift in market focus to climbing Covid-19 infection rates.

Fiscal and monetary support has buoyed markets despite the startling falls in economic growth and overall company profits. The willingness of investors to look through the current disruption to an anticipated recovery this quarter is imperilled by still rising virus infection rates. The global count of new cases hit a daily high on Saturday.

Investors in the region have much to contemplate this week. Interest rate decisions from the central banks of Australia and Malaysia, a general election in Singapore and the potential for unrest in Hong Kong lead the bill.  Analysts believe the Reserve Bank of Australia is unlikely to change its settings tomorrow. Short-term interest rates are trading below the cash rate, but this is more reflective of a flood of liquidity than any estimation of a change in rates.

Index futures point to opening falls in Japan, Hong Kong and Australia. Singapore futures finished slightly higher. US indices rose at this morning’s open, potentially offsetting some of the negative sentiment.

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