The Asian session will focus on the key economic release on Monday.
With no data for the Western economies, China will lead the markets to higher or lower.
CHI 50 – Daily Chart
Chinese stocks reversed a bounce from the recent support at 12,400, which will be the key to the week ahead. A European Central Bank rate hike on Thursday could create a sour week if China's economy is hampered by the covid zero lockdowns.
The market should get a boost from the bullish +776 close of the Dow Jones on Friday, adding to an intense day if GDP figures outperform. Markets expect a bounce to 3.4% from last month's 0.4%, but there is downside risk from the recent lockdowns. A firm number would boost the price of stocks and the demand outlook for commodities like oil.
There was also concern among traders after the economic data was delayed ahead of the National Congress, with some suggesting that it could mean bad news.
Xi Jinping said the economy is "resilient." He plans to strengthen economic ties with other countries as he begins a third term as head of the country's ruling party. "China cannot develop in isolation from the world. The world's development also needs China," Xi said.
At the party congress, Xi continued the "dual circulation" policy to insulate China from economic shocks and US sanctions while maintaining strategic trade and investment links around the globe. Xi said the latter part of that approach is most important, saying that the country's economic opening "will only be wider."
"We will fully deepen reform and opening up, firmly push forward high-quality development," he added.
Any changes will likely develop over time, and markets will focus on the Monday growth data instead. We will see if the government is holding back bad news ahead of the party conference. Traders should be on guard for volatility in the Chinese stock market.
