Asia markets move higher in muted session

The news shaping the markets today

Russia’s military forces struck a residential building in the south-eastern city of Zaporizhzhia in Ukraine. The safe-haven US dollar index rose slightly this morning.

Russia’s gross domestic product declined by 2.7% year-over-year in the fourth quarter versus a 3.5% decline in the prior three-month period. However, the figure was better than market expectations of a 7% contraction and lent support to the RUB/USD forex pair.

Greece’s trade deficit came in €2.26 billion in February, versus a year-ago gap of €3.34 billion, which sent the EUR/USD pair lower in forex trading this morning.

China’s foreign exchange reserves grew to $3.184 trillion at the end of March, versus $3.133 trillion in the previous month. The slow growth sent the CNY/USD pair lower in forex trading this morning.

Albania’s annual inflation rate eased for the fifth consecutive month to 5.3% in March, from 7.1% in the prior month. Despite this, the ALL/USD forex pair remained under pressure.

What’s happening: Asian stock markets recorded gains on Friday, mirroring the performance of Wall Street stocks the previous day.

What happened: Equity markets in Asia rose ahead of the all-important NFP (nonfarm payrolls) report from the US.

Markets in Japan, China and South Korea all recorded gains, while the others remained closed for Good Friday.

Why it matters: Investors assessed economic data released on Friday, which showed Japan’s household spending rising by 1.6% year-over-year in February, after a 0.3% decline in the previous month. However, the figure was short of market expectations of a 4.3% gain.

Japan’s average cash earnings also grew by 1.1% year-over-year in February, versus 0.8% growth in the prior month, and exceeded market estimates of 0.9%.

Preliminary readings also showed Japan’s leading index surging to a 4-month high in February, while the coincident index rebounded from an 8-month low.

Market sentiment was also boosted on news of Airbus planning to double its production capacity in China. The European plane-maker intends to setup a second assembly line at its existing factory in China, which will propel the country’s manufacturing sector.

The US NFP report released on Friday showed that the economy had added 236,000 jobs in March, the least job adds since December 2020. The figure also came in short of market expectations of 239,000. Although the latest data showed some cooling in hiring, it still signalled strength in the US labour market, which lend more flexibility to the Fed to hike rates in May.

The unemployment rate declined to 3.5% in March, versus expectations of 3.6%, while average hourly earnings grew 0.3% to $33.18 during the month.

Japan’s Nikkei 225 rose 0.17% to settle at 27,518, recording gains for the first time in three sessions, while the Topix added 0.21% to reach 1,965.44.

South Korea recorded a current account deficit of $0.52 billion in February, versus a year-ago surplus of $6.42 billion. The South Korean Kospi index climbed 1.27% to close at 2,490.41, with the Kosdaq gaining 1.67% to reach 880.07.

China’s Shanghai Composite rose 0.45% to 3,327.65, advancing for the fourth straight session. This also marked the highest close in over a month. The index closed the week with gains of 1.7%.

Stock markets in Australia, Hong Kong, India and Singapore remained closed for Good Friday.

What to watch: Traders await the release of inflation data from China on Tuesday. China’s annual inflation rate, which eased to 1.0% in February, is expected to accelerate to 2% in March. China’s producer prices are likely to decline 1% year-over-year in March, following a 1.4% decline in February.

The markets today

Bitcoin will be in focus today after recording gains this morning

Context: Crypto markets remained relatively flat last week, after making strong moves in the previous week.

Details: The banking crisis had lent support to cryptocurrencies, with investors adding digital coins to their portfolios to hedge exposure to fiat currencies.

Dogecoin rallied last week after Elon Musk changed Twitter’s iconic blue bird logo to Shiba Inu. There were speculations of Dogecoin being accepted as payments on the social media platform. Dogecoin added around 9% last week.

News of Ralph Lauren’s new luxury store, opened in Miami’s Design District last week, becoming the company’s first outlet to accept cryptocurrency payments lent support to sentiment for digital coins.

Bitcoin, the world’s largest and most popular virtual currency, entered the weekend slightly lower, after having breached $29,000 in the previous week. Ethereum, the world’s second largest cryptocurrency, rose during the weekend, ahead of the Shapella network upgrade.

Both Bitcoin and Ethereum began trading this week on a positive note. By 0500 GMT, Bitcoin had added around 1% to reach $28,296, while Ethereum had gained 0.2% to $1,857.

What are expectations: Traders now await inflation data from the US, scheduled for release on Wednesday. The annual inflation rate in the US, which slowed to 6% in February, is expected to ease further to 5.5% in March.

Other Markets: US trading indices closed higher on Thursday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.01%, 0.36% and 0.76%, respectively.

Support & resistances for today

Market snapshot

What else to watch today

Japan’s gauge for service sector sentiment and economy watchers survey outlook, Turkey’s unemployment rate, current account and labour force participation rate, Mexico’s car production and auto exports, Saudi Arabia’s industrial production, Brazil’s auto industry production, new vehicle sales and Central Bank of Brazil focus market readout, US wholesale inventories and consumer inflation expectations, as well as South Africa’s SACCI business confidence index.