Asian Markets to Drop After Worst Week of 2023 on Wall St; Governor of the Bank of Japan speaks with Japan’s upper house

Interest rates must go even higher to bring inflation down, Cleveland Federal Reserve President Loretta Mester said Friday.

“I see we need to get interest rates above 5%,” she told CNBC’s Steve Liesman during a “Squawk Box” interview. “We will figure out how much up there. That will depend on how the economy evolves over time. But I do think we need to be slightly above 5% and stay there for a while to put inflation on a sustainable downward path. get. up to 2%.”

Mester recently made headlines when she revealed she was among a small group of Fed officials who had been on January 31-February. 1 Federal Open Market Committee, wanted a rate hike of half a percentage point instead of a quarter-point step approved by the panel.

— Jeff Cox

Regional data for the Purchasing Managers Index, Japan’s industrial production and Australia’s gross domestic product will be some of the key economic events happening this week.

New Zealand will report its fourth-quarter retail sales on Monday, while Taiwan will celebrate Peace Memorial Day until Tuesday.

On Tuesday, Japan will report industrial production and retail sales, while Australia will report its fourth-quarter current account balance.

India will also report its gross domestic product for its fourth quarter on Tuesday. Overnight US consumer confidence data for February will also be released.

The South Korean market is closed on March 1 for Independence Day.

On Wednesday, China’s National Bureau of Statistics will release the government’s purchasing managers’ index, after it returned to growth of 50.1 in January.

Australia will release its inflation and gross domestic product figures for the fourth quarter. Economists polled by Reuters expect seasonally adjusted growth of 2.8% on an annual basis.

Indonesia will also release its February consumer price index, which is expected to rise to 5.42% from a previous reading of 5.28%, according to a Reuters poll.

On Thursday, fourth-quarter trade data from New Zealand will be released, along with South Korea’s industrial production and retail sales. S&P Global Manufacturing PMI for South Korea is also on the agenda.

Japan’s unemployment rate for January is expected to come in at 2.5% for January on Friday, according to a Reuters poll. Tokyo’s consumer price index for all items except fresh food is expected to be up 3.3% in January.

— Jihye Lee

According to Baird analyst Ross Mayfield, the market is currently feeling the effects of “too much good news at once”. With inflation remaining hot and the Federal Reserve expected to continue rate hikes, Mayfield advises investors to “control what [they] can control.”

“First, automate things: dollar cost averaging (investing over regularly scheduled intervals) is a great way to find outperformance in volatile/sideways markets,” Mayfield wrote in a Friday note.

“Second, review your allocation to make sure you’re well diversified and on plan.”

— Hakyung Kim

US stocks closed lower on Friday, ending their worst week of 2023.

The Dow Jones Industrial Average fell 336 points, or 1.0%. The S&P 500 and Nasdaq Composite fell 1.0% and 1.7%, respectively. The Dow fell as much as 510 points, or 1.54%, earlier in the trading session.

— Hakyung Kim