The Shanghai Composite Index retreated 18 points or 0.5% to 3,432 in early trade on Monday, after China Saturday imposed a record of CNY 18 billion fine on Alibaba after an anti-trust probe found the firm had abused its market position. Risk appetite was also dented by reports that mainland China logged 16 new COVID-19 cases on Sunday, up from 10 a day earlier. Meantime, the US Federal Reserve warned that the virus remains a threat to the economy. Adding to the bearish tone, the US said on Sunday that it is concerned about China’s aggressive actions against Taiwan. In business news, Reuters said that a growing number of Chinese tech start-ups are canceling plans to list on Nasdaq-style markets at home, as regulators tighten scrutiny of IPO applicants. Meantime, data out this week are expected to show US inflation surged in March, while retail sales are seen soaring. Basic materials led the falls, followed by healthcare and industrials.

US Futures eased from record highs in early Asian trade Monday, following the 3rd consecutive week of gains amid the US Federal Reserve’s expectations of a swifter economic recovery as investors paused ahead of US earnings, while bond markets remained elevated ahead of potentially strong readings for inflation and retail sales this week. Traders were also monitoring fallout from Alibaba Group Holdings after China hit the e-commerce giant with a record US$2.75 billion fine. US 10-year bond yields were at 1.673%, as Federal Reserve Chair Jerome Powell noted that the US economy is at a turning point thanks to government support and a speedy campaign to inoculate Americans against Covid-19. On the data front, US producer prices rose more than expected in March, recording the biggest annual gain in 9-1/2 years. Last week, the Dow added more than 1%, the S&P 500 gained nearly 2%, while the Nasdaq Composite rallied 2.4%.

The retail price index in the Philippines increased by 1.4 percent year-on-year in February 2021, after a 1.3 percent gain in the previous month. This was the highest reading since August 2020, with cost rising further for food (2.3 percent vs 2.5 percent in January), beverages and tobacco (6.5 percent vs 6.5 percent), crude materials (2.1 percent vs 2.2 percent), manufactured goods (0.9 percent vs 1.2 percent), and miscellaneous manufactures articles (0.3 percent vs 0.4 percent). At the same time, prices of mineral fuels, lubricants, and related materials dropped must softer (-0.7 percent vs -6.0 percent). Meanwhile, cost was flat for both chemicals and machinery and transport equipment.

The Japanese Yen fell 0.118 points or 0.11% to 109.733 on Monday as investors retreated with rising coronavirus infection rates locally after the governors of Tokyo, Kyoto and Okinawa enhanced their responses to the coronavirus pandemic, less than a month after Japan fully lifted a second COVID-19 state of emergency. Over the weekend, Federal Reserve Chair Jerome Powell said the US economy was about to start growing much more quickly, though the coronavirus remained a threat. Local 10-year yields lifted to 0.109% while US 10-year rates were at 1.66% as data out this week is expected to show US inflation jumped in March, while retail sales is seen surging perhaps even with a double-digit gain. In local data, producer prices increased 1% on-year in March, while the value of loans increased 6.30% over the same period and machine tool orders increased on-month to a 1-1/2 year high.

The NIKKEI 225 opened flat at 2765.92 on Monday, following losses of 0.2% in the previous week as investors weighed expectations for a swifter economic recovery in the US with rising coronavirus infection rates locally. Over the weekend, Federal Reserve Chair Jerome Powell said the economy was about to start growing much more quickly, though the coronavirus remained a threat. Meantime, data out this week are expected to show US inflation jumped in March, while retail sales is seen surging perhaps even with a double-digit gain. In local news, the governors of Tokyo, Kyoto and Okinawa enhanced their responses to the coronavirus pandemic Monday amid a resurgence of infections, less than a month after Japan fully lifted a second COVID-19 state of emergency. In local data, producer prices increased 1% on-year in March, while the value of loans increased 6.30% over the same period and machine tool orders increased on-month to a 1-1/2 year high.

Producer prices in Japan rose by 1 percent year-on-year in March 2021, after a downwardly revised 0.6 percent fall a month earlier and beating market consensus of a 0.5 percent growth. This was the first producer inflation since February 2020, mainly boosted by beverages & foods (1.1% vs 1% in February), chemicals & related products (0.9% vs -1.7%), petroleum & coal products (9.8% vs -6%),iron & steel (2.2% vs 1.3%), non-ferrous metals (28.7% vs 17.9%), and other manufacturing industry products (0.4% vs 0.7%). In contrast, there were falls in cost of transportation equipment (-0.4% vs -0.5%), electrical machinery & equipment (-0.4% vs 0.1%), production machinery (-1.2% vs -1.7%), metal products (-0.3% vs 0.2%), general purpose machinery (-0.2% vs flat reading), electronic components & devices (-0.2% vs -0.6%), and information & communications (-1.9% vs -1.2%). On a monthly basis, producer prices went up 0.8 percent, after an upwardly revised 0.6 percent gain in February..

Crude oil prices gained slightly in early Asian trading on Monday after WTI crude posted its worst week in three amid concerns that rising global coronavirus cases are slowing the economic recovery, while the market is also facing rising supply after the OPEC+ alliance agreed to add more barrels from May. In the US, Federal Reserve Chair Jerome Powell noted the US economy was poised for stronger growth and cautioning that Covid-19 still remains a threat. Investors continue to monitor the negative impact of extended restrictive measures in Europe, alongside slow vaccine rollouts and rising COVID-19 cases in top consumers India and Brazil. Iran is also a wildcard for the market as Talks between the OPEC producer and world powers on resuscitating a 2015 nuclear accord are set to continue this week, described by a senior US official as a good first step but still short of what’s necessary for a revival of the deal.

The Ulster Bank Construction PMI in Ireland rose to 30.9 in March 2021 from February's reading of 27.0. However, this was the third straight month of fall in the construction sector, amid the the pandemic-related restrictions. Housing work shrank at a softer rate (33.8 vs 23.8 in February) on the back of a further reduction in both commercial activity (31.3 vs 31.2) and civil engineering work (23.8 vs 19.5). New orders fell at a slower rate, employment continued to decline solidly, and buying activity dropped for the third month running. The twin factors of Brexit and COVID-19 were reportedly responsible for continued severe delays in receiving purchased items, while there were also mentions of capacity pressures at suppliers. On the price front, input cost inflation went up for the third month in a row and was the fastest since February 2018, amid rising costs for shipping and raw materials such as metals. Finally, sentiment hit its highest in 2-1/2 years.

The KOSPI added 13.63 points or 0.44% to 3145.51 in early Monday deals, following gains of 0.33% gains in the previous week and trading near 7-week highs as comments from the US Federal Reserve Chair Jerome Powell boosted risk sentiment, noting the US economy is set to make a turnaround with increased growth that should provide more jobs. Local 10-year yields fell to 2.021% while US 10-year rates lifted to 1.669%. On the coronavirus front, the KDCA reported 587 more COVID-19 cases, falling back below 600 for the first time in 6 days Monday partly due to fewer tests over the weekend, amid looming concerns over the fourth wave of the pandemic. In local data, exports rose 24.8% on-year in the first 10 days of April, while imports increased 14.8%, resulting in a trade deficit of $1.7 billion as shipments of chips and autos remained robust amid an economic recovery from the pandemic.