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<\/a><\/p>\nBy Jamie McGeever<\/p>\n
(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever.<\/p>\n
An unholy trinity of U.S. developments on Tuesday – poor corporate earnings, a bank’s value going up in smoke and slumping consumer confidence – will likely set an extremely gloomy tone for Asian markets on Wednesday.<\/p>\n
This will be the backdrop to trade figures from Thailand and New Zealand, industrial production data from Singapore and inflation figures from Australia.<\/p>\n
The three main indexes on Wall Street closed down between 1% and 2% – the Nasdaq’s 2% fall was its steepest in six weeks – as fears over recession and the banking sector intensified.<\/p>\n
\n(Graphic: First Republic Bank shares collapse – https:\/\/fingfx.thomsonreuters.com\/gfx\/mkt\/gkvlwabagpb\/FRC.png)<\/p>\n
\nThe travails at First Republic Bank should be a wake-up call to anyone who thought the U.S. banking turmoil had somehow been cleared up in a matter of weeks.<\/p>\n
After reporting on Monday a plunge of more than $100 billion in deposits in the first quarter, shares on Tuesday plunged 50% at the bank – the 15th largest in the country at the start of the year. The bank has lost 93% of its value this year.<\/p>\n
The wider U.S. regional banking index’s 4% slide – its fourth straight decline – took its year-to-date decline to 25%.<\/p>\n
\n(Graphic: US regional banking share index – https:\/\/fingfx.thomsonreuters.com\/gfx\/mkt\/zdvxdkqkrvx\/RegionalBanks.png)<\/p>\n
\nNotably, the plunge in U.S. bond yields and Fed expectations on the back of this did not weaken the dollar – safe-haven buying pushed it up 0.5% for one of its best days since the banking shock in mid-March.<\/p>\n
Safe-haven flows dominated trading on Tuesday, with the Japanese yen, Swiss franc, government bonds and gold all posting strong gains.<\/p>\n
If there is a tailwind for Asian markets on Wednesday amid the headwinds it will be the after-hours results from Google’s parent company Alphabet and Microsoft. Profits at both tech giants topped Wall Street estimates, and shares in both rose 4% in after hours trading.<\/p>\n
On the economic data front on Wednesday, Australian weighted annual CPI inflation is expected to have finally slowed in the first quarter to 6.9% from a 33-year high of 7.8%.<\/p>\n
\n(Graphic: Australian weighted CPI inflation – https:\/\/fingfx.thomsonreuters.com\/gfx\/mkt\/movakdwdkva\/AUSinflation.png)<\/p>\n
\nHere are three key developments that could provide more direction to markets on Wednesday:<\/p>\n
– Australia CPI inflation (Q1)<\/p>\n
– Singapore manufacturing (March)<\/p>\n
– Thailand trade (March)<\/p>\n
\n(By Jamie McGeever; Editing by Josie Kao)<\/p>\n
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