APAC stocks started the week with mixed performance, drawing initial inspiration from Wall Street’s positive momentum. The tech sector led the rally in the US, with major indices closing higher, fueling optimism in Asia-Pacific markets. However, regional dynamics added some complexity to market movements.

China’s Fiscal Focus: Key Briefing on October 12th

All eyes are on China’s Finance Ministry, which will hold a press briefing on fiscal policy and economic development on October 12th at 10:00 local time (03:00 BST/22:00 EDT). The briefing is expected to introduce further details on fiscal policy adjustments, a move that signals China’s intention to intensify its efforts to support economic growth. This announcement comes at a crucial time, as China continues to navigate the challenges of a slowing economy and looks for ways to stimulate demand.

Central Bank Activity in APAC: RBNZ and RBI Announcements

On the central bank front, the Reserve Bank of New Zealand (RBNZ) cut its Official Cash Rate (OCR) by 50 basis points to 4.75%, a widely anticipated move aimed at managing inflation and supporting growth. Meanwhile, the Reserve Bank of India (RBI) opted to maintain its Repurchase Rate at 6.50%, in line with market expectations. Both decisions reflect the ongoing balancing act faced by central banks in addressing inflationary pressures without stifling economic activity.

Geopolitical Tensions: Biden and Netanyahu to Discuss Iran

In global political developments, US President Joe Biden and Israeli Prime Minister Benjamin Netanyahu are scheduled to speak on Wednesday. This follows comments from a senior Israeli official, indicating that Israel intends to respond to the recent Iranian attack. However, the response is expected to be measured, with the goal of avoiding an escalation into a full-scale war with Iran. This delicate geopolitical situation will likely have implications for market sentiment, especially in energy markets.

European Markets: A Slow Start Expected

European equity futures are pointing to a quiet open, with the Euro Stoxx 50 future trading flat after Tuesday’s cash market session ended 0.4% lower. This suggests a cautious start to the day as investors digest recent developments and await fresh catalysts.

Key Events to Watch

Looking ahead, investors will be closely monitoring several key data releases and central bank speakers. Notable highlights include the German Trade Balance, US Wholesale Sales, and minutes from both the Federal Open Market Committee (FOMC) and the National Bank of Hungary (NBH). Additionally, several key figures from central banks are set to speak, including the ECB’s Elderson and Fed officials such as Bostic, Logan, Goolsbee, Jefferson, Barkin, Collins, and Daly. On the supply side, markets will keep an eye on bond issuances from the UK, Germany, and the US.

APAC markets are navigating a mix of influences, from Wall Street’s tech-driven gains to local fiscal and monetary policy decisions, all while geopolitical risks linger in the background. With key events on the horizon, including China’s fiscal policy update and several major economic releases, investors are likely to remain cautious but attentive to potential opportunities.