Nikkei leads Asia higher into event-packed week

Nikkei leads Asia higher into event-packed week

SYDNEY  — Asian share markets firmed on Monday as the Nikkei reached another new high and investors braced for a week packed with central bank events and major data that will refine market wagers for when interest rates will start falling.

All eyes will be on Federal Reserve Chair Jerome Powell when he testifies before lawmakers on Wednesday and Thursday, though analysts assume he will stay in wait-and-see mode on policy given recent upside surprises on inflation.

The February payrolls report on Friday could also shift the calculus with forecasts favoring a still-solid rise of 200,000 after January’s barnstorming 353,000 jump.

READ: Asian stocks firm before US inflation test; yen gains

The European Central Bank meets Thursday and is considered certain to keep rates at 4 percent, but also lower its outlook for inflation in a nod to eventual cuts.

“The focus will be on the changes to the macro projections and on the tone, which we expect to be dovish but cautious – in a risk-management posture that should point to June for the first move lower in rates,” wrote analysts at NatWest Markets in a note.

“100 basis points still seems the right amount of cuts for this year,” they added. “While the ECB is not pressed to act with urgency and may prefer to start with a 25bp clip, instead of our central scenario of a first 50bp cut in June.”

The Bank of Canada is likewise expected to stay on hold this week, with a first cut seen in June or later.

Other events of note include President Joe Biden’s State of the Union address, the Super Tuesday U.S. primaries and China’s National People’s Congress (NPC) meeting which might flag new stimulus measures.

Nikkei heads north

MSCI’s broadest index of Asia-Pacific shares outside Japan edged

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