Asian Markets Rise As China’s Consumption Rebounds

Asian stock markets saw gains following better-than-expected consumption data from China at the start of the year, signaling potential economic recovery. Meanwhile, U.S. equity futures dropped, with Treasury Secretary Scott Bessent downplaying concerns over the recent market downturn, describing it as a healthy correction.

Stocks in Australia, Japan, and South Korea advanced, with a key index tracking Chinese stocks listed in Hong Kong climbing as much as 1.3%. However, China’s onshore CSI 300 Index showed fluctuations, reflecting investor caution amid concerns over a deepening housing slump in the world’s second-largest economy.

Oil prices also saw an uptick, marking a second consecutive day of growth. This increase was driven by optimism regarding stronger demand from China, the world’s top importer of crude. The dollar remained stable throughout the trading session.

Despite mixed economic signals from China, investors are looking ahead to a crucial policy briefing scheduled for Monday afternoon. The Chinese government is expected to unveil measures aimed at stabilizing the stock and property markets, as well as boosting wages and addressing the country’s low birth rate. Analysts note that rejuvenating consumer spending is central to Beijing’s strategy to counteract protectionist policies from the United States, which are disrupting global trade and slowing Chinese exports.

Charu Chanana, chief investment strategist at Saxo Markets, emphasized, “China’s latest measures reinforce that boosting consumption is a top priority this year. This could broaden the momentum in Chinese stocks, particularly those in tech, consumer, travel, and healthcare sectors.”

In Asia, Treasuries saw slight gains, with the benchmark 10-year yield dipping by 1 basis point to 4.30%.

In the United States, stock futures were impacted by comments from Treasury Secretary Bessent, who reassured markets that the recent downturn, which has seen trillions of dollars wiped from equity values, is a healthy part of the economic adjustment as the U.S. reshapes its policies.

This week, markets will be closely watching a series of central bank meetings, with policymakers bracing for the ongoing effects of President Donald Trump’s trade policies. The Bank of Japan is expected to hold rates steady after last month’s hike, while the Bank of England is anticipated to keep its stance unchanged. Federal Reserve Chairman Jerome Powell faces the delicate task of assuring investors that the U.S. economy remains robust while signaling that the Fed is ready to intervene if necessary.

Barclays analysts noted, “The Trump administration has shown greater tolerance for adverse economic fallout from tariffs than expected. We foresee only one rate cut this year, with two more in 2026.”

Meanwhile, European stock futures edged up in Asia after German Chancellor-in-waiting Friedrich Merz announced that an agreement had been reached with the Green party on a debt-funded defense and infrastructure spending plan, boosting both the country’s fiscal outlook and the value of the euro.

Gold, which had seen a rise earlier in the week, turned flat after its first decline in four days, driven by shifts in market sentiment.

Key Events to Watch This Week:

U.S. retail sales and Empire manufacturing data (Monday)
Canada CPI report (Tuesday)
U.S. housing starts, import price index, and industrial production (Tuesday)
Brazil rate decision (Wednesday)
Eurozone CPI report (Wednesday)
U.S. Federal Reserve rate decision (Wednesday)
U.K. jobless claims, EU defense summit in Brussels, and speeches from ECB President Christine Lagarde and Bank of Canada Governor Tiff Macklem (Thursday)
U.S. jobless claims, existing home sales (Thursday)

Market Movements:

Stocks: S&P 500 futures down 0.5%, Nikkei 225 futures up 1.2%, Australia’s S&P/ASX 200 up 0.7%, Hong Kong’s Hang Seng up 1.3%, Shanghai Composite up 0.3%.

Currencies: Bloomberg Dollar Spot Index stable, euro at $1.0884, Japanese yen down 0.1% to 148.85, offshore yuan stable at 7.2427.

Cryptocurrencies: Bitcoin up 0.5% to $83,669.38, Ether up 0.6% to $1,905.73.

Bonds: U.S. 10-year Treasury yield unchanged at 4.30%, Australia’s 10-year yield down to 4.41%.

Commodities: WTI crude up 0.7% to $67.67 per barrel, gold stable.

With significant economic data and policy meetings on the horizon, global markets are bracing for further volatility, while investors seek clarity on the future direction of key economic policies.