- Japan stocks on track for their worst day in 12 months as the strong Yen weighs on the market
- China breaks its deflationary streak
- Brent crude falls below $82
- US CPI and retail sales come into focus
- FTSE 100 also is expected to lose ground in early tradingFTSE 100
- Gold price hovers close to record highs
Derren Nathan, head of equity research, Hargreaves Lansdown:
“The Nikkei is down around 3% today, as the markets raise expectations of a rate rise by the Bank of Japan next week. Following on from a poor week for US tech stocks, the sector is under pressure in the land of the rising sun. After Nvidia shares had the wind knocked out of their sails last week, semiconductor firm Renesas has taken a big fall, as has the country’s biggest automobile manufacturer, Toyota, with the strengthening Yen sparking fears over exports. Stocks on the Chinese markets have fared better, following the weekend’s CPI data showing prices were up 0.7% in February, after a four-month run of deflationary read-outs. Nevertheless, concerns over Chinese growth continue to hold back the oil price, with Brent Crude falling to below $82 per barrel.
US stocks look set to tick down on the open, inching away from record highs seen last week. Mixed jobs data on Friday gave the Fed plenty to think about, as investors continue to play the waiting game as to when the starting gun for rate cuts will be fired. Despite nonfarm payrolls adding 275,000 against forecasts of 200,000, US unemployment has hit a two year high of 3.9%.
Policy setter’s gaze will now turn to consumer prices, with February’s CPI data expected tomorrow. Anything north of the 3.1% forecast for annual rate rises may push expectations of a rate cut further down the road. Retail sales on Thursday will be another key measure as to how hot or not the economy is running. Investors looking for an index to buck the downward trend are unlikely to find any comfort in the FTSE 100, which is expected to extend Friday’s losses at the open.
The Gold price remains close to record highs after last week’s surge. Some may read gold’s strength as an indicator of confidence in summer rate cuts, but continued geopolitical tensions have also been a key contributor.”
