© Reuters. FILE PHOTO: A man wearing a protective face mask, following an outbreak of the coronavirus, talks on his mobile phone in front of a screen showing the Nikkei index outside a brokerage in Tokyo, Japan, February 26, 2020. REUTERS/Athit Perawongmetha/File Ph
By Wayne Cole
SYDNEY (Reuters) – Asian shares made a poor start on Monday to a week packed with major U.S. and Chinese economic data and the launch of Apple (NASDAQ:)’s latest iPhones, while the faltered tantalisingly close to heights last visited in 1990.
Hopes for fresh stimulus from a new prime minister in Japan saw the Nikkei surge 4.3% last week, and made those 30-year highs on Friday, but vertigo appeared to set on Monday as the Nikkei slipped.
Reports that U.S. Democrats were considering proposals to raise taxes on corporations and the wealthy, while not exactly new, could make for a cautious mood.
Adding to concerns about China’s regulatory crackdown was an FT report that Beijing is aiming to break up Alipay, the hugely popular payments app owned by Jack Ma’s Ant Group.
China releases a swath of data on retail sales, industrial output and urban investment on Wednesday that analysts fear will show a further slowdown in the world’s second-biggest economy.
MSCI’s broadest index of Asia-Pacific shares outside Japan lost 1.2%, to more than reverse a rally last Friday. Chinese blue chips were off 0.5% and most markets in the region were modestly in the red.
Both Nasdaq futures and were little changed, after running into profit taking last week.
Wall Street suffered its worst run since February as doubts about the resilience of the global economic recovery hurt former reopening darlings in energy, hotels and travel.
Apple will be a focus after sliding on Friday following an unfavourable court ruling related to its app store, just days before it unveils the new iPhone line up.
Also highlighting are readings on U.S. consumer prices on Tuesday, which is expected to see core inflation ease a touch to 4.2%, while retail sales on Thursday could show another decline as the spread of the Delta variant spooks shoppers.
The importance of the CPI was underlined by Philadelphia Fed President Patrick Harker who told the Nikkei he wanted to start tapering this year just in case the spike in inflation proved more than transitory.
Harker favoured scaling the tapering down over an 8 to 12 month period, which is longer than some hawks have touted.
“Global markets are fixated on the timing of tapering of QE by central banks, particularly the Fed,” said analysts at ANZ in a note.
“That’s unsurprising, given the support that the extra liquidity has provided to equities and assets more generally,” they added. “The latest guidance from senior FOMC officials is that tapering is still very much on the agenda this year, but is unlikely to be announced until November.”
The tension is only set to mount ahead of the Fed’s next meeting on Sept. 21-22, and played a part in nudging U.S. 10-year…
Read More: Asia shares slip, Nikkei stalls near 30-year high By Reuters