By Michael Kitchen
LOS ANGELES (MarketWatch) -- Asian markets will digest a mix of
Chinese economic data, Japanese auto-maker earnings and
interest-rate decisions from Australia and India in the coming
week.
China is slated to kick off the action Monday with a pair of
manufacturing surveys expected to show a mild slowing in
production, due partly to government measures to cut capacity in
some industries.
According to the median of a Reuters survey of economists, the
official purchasing managers' index for October is expected to drop
to 52.9 from September's 53.8, but still above the 50 mark that
separates expansion from contraction.
The same day, HSBC's private-sector version of the China PMI is
also due out, and although it will likely differ from the official
version, the trend will probably be the same.
Results from both the HBSC survey and the official version,
published by the China Federation of Logistics and Purchasing, will
likely be weighed by Beijing's efforts to cool the economy --
including capacity-cutting moves -- and the weeklong national
holiday at the beginning of the month.
On Tuesday, the Reserve Bank of Australia will decide whether to
return to interest-rate tightening after a long pause, though most
economists expect no change.
The final nail in the coffin for a November RBA rate hike came
this past week, when Australian consumer price inflation came in at
a mild 0.7% for the July-September quarter. The data were enough to
send the Australian dollar lower, as the market expressed doubt
over an increase at the upcoming meeting.
In India, the situation is reversed, with many economists
calling for tightening due to above-target inflation.
The Reserve Bank of India sets two key policy rates: the
repurchase rate for lending and the reverse repurchase rate for
borrowing. Most economists surveyed by Reuters see both rising by a
quarter-point.
The forecast is based on an acceleration in the nation's
benchmark wholesale-price inflation for September to 8.62%, up from
August's 8.5%, and well above what the central bank has said it
would like.
Rounding out the week, Nissan Motor Co. (NSANY) and its larger
rival Toyota Motor Corp. (TM) will announce July-September earnings
on Thursday and Friday, respectively.
Despite strength in the yen weighing on earnings, both are
expected to post strong growth, all the more so after Honda Motor
Co. (HMC) said this past Friday that its profit more than doubled
in the past quarter.
Helping the results were strong sales in emerging markets and
the comparison against last year's weak July-September quarter.
Still, the high value of the yen will remain an issue --
especially for Toyota, which makes a relatively large proportion of
its autos in Japan -- so analysts will keep a close eye on the
companies' forecasts and projections for the yen's rates against
rival currencies.
Also expected to make news next week is U.S. President Barack
Obama's visit to the region, which kicks off Thursday in India. The
10-day tour includes stops in China, Indonesia, Singapore and South
Korea. And coming just ahead of the Group of 20 leaders summit,
economics will no doubt be on the agenda.
Next week, Japanese markets will close Wednesday for Culture
Day, while the Indian holiday of Diwali will close markets there as
well as in Singapore and Malaysia, which have sizable ethnic-Indian
populations.