It will be a busy week in Asia Pacific, with central bank decisions scheduled in India, New Zealand and South Korea and data due from major economies including China, while the earnings season kicks off in full Down Under.
Setting the tone for markets, the U.S. non-farm payroll report released Friday showed the U.S. economy added 255,000 jobs in July, beating expectations for 180,000. Good news on the jobs front may spur the U.S. Federal Reserve to increase interest rates sooner than the market had expected.
Other factors may also spur volatility in markets.
"Seasonal September quarter weakness along with risks around Italian banks, the Fed and global growth generally could still see more volatility in shares in the short term," said Shane Oliver, head of investment strategy and chief economist at AMP Capital in a note to clients.
Health-check for China
There are several important data releases in China this week, including trade, inflation, industrial production, retail sales and fixed asset investments.
"In July, we expect that overall economic growth momentum remained largely stable," said economists Helen Qiao, Xiaojia Zhi and Sylia Sheng at Bank of America Merrill Lynch.
The economists said they expected the on-year growth of real industrial production and nominal fixed asset investment to have gone up last month, supported by the "resilience in infrastructure construction demand and favorable base effects."
They expected industrial production growth to edge up to 6.3 percent on-year, up from 6.2 percent in June.
JPMorgan analysts wrote in a separate note that the slowing fixed investment growth was "partly driven by weak private investment."
"From the industry perspective, it appears investment in the traditional industries, such as mining and metals, have underperformed significantly, while investment in the new and services industries ... [have] outperformed notably," the JPMorgan analysts said.
But both sets of market watchers agreed that the recent floods in southern China could throw a wrench in the works as they likely disrupted "real activities," which meant the data print could come in lower than expected.
Central bank watch in the region
After the Bank of Japan increased its purchase of exchange-traded funds (ETFs) and the Reserve Bank of Australia cut interest rates to a new record low, markets will be looking at central banks in India, New Zealand and South Korea, all due to meet this week, to see if they also followed up with additional easing.
The Reserve Bank of India's outgoing Governor Raghuram Rajan will present his final bi-monthly policy review on Tuesday before stepping down in September.
Moody's Analytics said in a note Friday it expects the India central bank to keep the repo rate at 6.5 percent and that the RBI is unlikely to cut until the "monsoon season finishes in September."
In New Zealand, the central bank will meet on Thursday and some market watchers expected interest rates could be slashed further. The Reserve Bank of New Zealand said in its latest economic update released in July that prospects for growth in the global economy had diminished despite "very stimulatory monetary policy and low oil prices," and that financial volatility had increased following the U.K.'s decision to leave the European Union.
Kate Hickie and Paul Dales from Capital Economics said they expected the RBNZ to cut interest rates from 2.25 percent to 2 percent and to "confirm that it is willing to reduce rates further."
They said a "stubbornly high exchange rate, low inflation expectations and subdued wage growth" could likely see an additional rate cut below 2 percent.
Earnings season Down Under
After a handful of companies, including miner Rio Tinto, released quarterly earnings last week, several big names were set to release their results this week, including Commonwealth Bank of Australia, Telstra and News Corp.
Economic conditions have somewhat improved since the beginning of the year, after oil and other resource prices stabilized and China's economy found its footing again.
AMP Capital's Oliver said sectors likely to see good profits included discretionary retail, industrials, gaming and healthcare.
"Expect disappointers to be punished severely with sharp share price falls," he warned.
On tap this week
Monday
China - July trade
Earnings - DBS, Nagacorp, Bendigo & Adelaide, Sina Corp, Weibo
Tuesday
China - CPI, PPI, 9:30 a.m. HK/SIN
India - Reserve Bank of India monetary policy decision
Earnings - MTR Corp., Vanke Property, Tokio Marine, Dai-ichi Life Insurance, REA Group, Transurban, Cochlear
Wednesday
Australia - June housing finance
China - July monetary aggregates
India - July foreign trade
Japan - Machinery orders
Earnings - HK Exchange, Hong Kong & Shanghai hotels, Commonwealth Bank of Australia, Fairfax Media, Oz Minerals, AGL Energy
Thursday
New Zealand - Reserve Bank of New Zealand monetary policy decision
South Korea - Bank of Korea monetary policy decision
Earnings - Telstra, Goodman Group, PCCW, China Mobile
Friday
China - Industrial production, Fixed Asset Investment, Retail Sales
India - Industrial production, CPI
Earnings - Sands China, Acer