Triple dose of central banks as technology and oil collapse

A look at the day ahead in Asian markets.

Three monetary policy decisions dominated Asian markets on Wednesday. Investor sentiment and risk appetite are likely to remain in check due to the sell-off seen on Wall Street the previous day and concerns about technology and the global economy.

Central banks in Indonesia, Thailand and the Philippines set interest rates on Wednesday, while recent inflation in New Zealand, unemployment in South Korea and Japanese machinery orders are also on the agenda.

Oil prices are falling again, partly due to weak demand, especially from China. Crude oil futures fell nearly 5% on Tuesday, pushing U.S. crude oil prices below $70 per barrel, bringing the year-over-year decline to 20%.

Technology concerns pushed US stocks lower, although earnings from financial heavyweights Goldman Sachs, Citi and Bank of America were positive. Nvidia and ASML stocks led the global technology sector's decline. As the week goes on, attention turns to Taiwan Semiconductor Manufacturing Company, the contract manufacturer that produces Nvidia processors.

The company is expected to report a 40% jump in quarterly profits on Thursday thanks to higher demand.

On Wednesday, the Bank of Indonesia is expected to leave interest rates unchanged despite inflation falling to its lowest level since 2021, with the exchange rate at the forefront of policymakers' considerations.

Inflation fell to 1.84%, within Bank Indonesia's target of 1.5% to 3.5% over the year, but the rupiah has fallen more than 3% since its peak in September.

The Bank of Thailand is also expected to keep the one-day repo rate at 2.50% for the rest of the year. In a poll conducted by Reuters, four of 28 economists expected a cut of a quarter of a percentage point.

On the other hand, the Philippine central bank is expected to cut the overnight interest rate by 25 basis points, to 6.00%, again in December, as policymakers look to support economic growth while keeping inflation under control.

The central bank began its easing cycle in August and since then inflation has fallen below the bank's target of 2%-4%.

Meanwhile, investors continue to digest details of China's stimulus measures announced over the weekend, as well as the recent deluge of data. None of this is particularly encouraging, as Chinese markets are heading lower, although stocks remain well above pre-stimulus levels.

Beijing announced on Tuesday that a press conference will be held on Thursday to discuss promoting the “steady and healthy” development of the real estate sector. However, if this announcement was intended to reassure investors, it failed.

The Shanghai blue-chip index fell 13% from its peak last Tuesday, but was still 20% higher than the day before Beijing unveiled measures to support markets, real estate and growth.

Here are the key developments that could give markets a new direction on Wednesday:

– Interest rate decisions in Indonesia, Thailand and the Philippines

– Seiji Adachi from the Bank of Japan speaks

– Inflation in New Zealand (Q3)