Asia markets set for mixed open ahead of crunch central bank meetings

Japan’s wholesale prices rose 5.1% in May from the previous year, slightly lower than the 5.8% recorded in April.

The increase in the producer price index was the slowest rate in since July 2021, and lower than estimates from economists polled by Reuters that forecast a rise of 5.5%.

On a month-on-month basis, wholesale prices fell by 0.7%, sharply lower than the 0.2% expected by Reuters.

— Lim Hui Jie

There’s a risk that stocks will go downhill from here, says Paul Christopher, head of global market strategy at Wells Fargo Investment Institute.

“There is likely more downside risk in stocks at this point (a.k.a. Don’t chase this equity rally),” he told CNBC. “Markets are too complacent in our opinion.”

He explains why.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Global central bank meetings will be under the spotlight this week, including the U.S. Federal Reserve, the Bank of Japan as well as the European Central Bank.

On Monday, Japan’s producer price index and China’s new yuan loans are scheduled to be released. Indonesia’s consumer confidence, Malaysia’s retail sales and India’s industrial production and inflation rates will be published as well.

Tuesday will be a market holiday in South Korea and Indonesia will publish its retail sales for the month of April. The U.S. consumer price index for May will be released as the Federal Open Market Committee (FOMC) takes place on the 13 to the 14th.

South Korea’s import and export prices for May will be out on Wednesday alongside its unemployment rate. China reports its foreign direct investment for the month of May. New Zealand is scheduled to release its first quarter current account print.

A slew of economic data from China will be released on Thursday, including its industrial production, retail sales, unemployment rate and home prices for the month of May.

New Zealand will publish its gross domestic product for the first quarter of this year also on Thursday, as Japan’s balance of trade for May and its machinery orders for April will be released on the same day as its central bank’s meeting will kick off. The Eurozone Central Bank will announce its latest interest rate decision overnight.

On Friday, Singapore’s non-oil domestic exports for May will be published and the Bank of Japan will conclude its central bank meeting.

— Jihye Lee

U.S. Treasury yields rose on Friday as investors looked ahead to the Federal Reserve monetary policy meeting on June 13 and 14, where officials will announce a fresh interest rate decision.

Uncertainty about whether the central bank will continue or pause its rate-hiking campaign has spread recently, but jobs data released on Thursday prompted investors to believe the Fed will not increase rates again next week.

At 4:24 a.m. ET, the yield on the 10-year Treasury was up by almost four basis points to 3.7529%. The 2-year Treasury yield was trading more than three basis points higher at 4.5556%.

— Sophie Kiderlin

— Hakyung Kim, Gina Francolla

Corporate earnings for the S&P 500 are expected to post a third consecutive decline in the second quarter, according to an estimate Friday from FactSet.

Profits are projected to decline 6.4% from a year ago during the April-through-June period. That would be the biggest drop since the pandemic-scarred second quarter of 2020 and worse than the 2.1% decrease from the first quarter.

On March 31, FactSet was expecting a 4.8% drop for the quarter. Since then, 66 companies have issued negative earnings guidance while 44 have issued a positive outlook.

FactSet’s John Butters said the firm expects earnings to turn around in the second half of the year, increasing 0.8% in the third quarter and a robust 8.2% to close the year.

—Jeff Cox