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Australian markets brace for flurry of earnings

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Asia markets will likely be searching for direction this week with few market-moving data scheduled for release, while the Australian market will brace for another busy earnings week.

Early Monday morning, data from Japan's cabinet office showed growth in the world's third-largest economy was flat in the three months to June from the January-March quarter, missing economists' expectations.

The subdued numbers will likely revive doubts over Japanese Prime Minister Shinzo Abe's efforts to steer the economy. Japan announced a 28 trillion yen ($265 billion) stimulus package in July in an attempt to prop up Japan's moribund economy.

The gross domestic product (GDP) data from Japan showed exports weighed on growth in the April-June quarter. Investors will likely pay close attention to the July trade data due Thursday.

Moody's Analytics said in a Friday note that Japan's exports "likely slid further in July, narrowing the seasonally adjusted trade surplus to 200 billion yen in July."

"The rising yen and weaker global demand are crimping Japan's manufacturing-related exports," economists at Moody's said.

While reporting their quarterly earnings in the past several weeks, many major Japanese exporters indicated sizable losses in revenue due to a stronger yen.

In Thailand, the economy expanded 0.8 percent in the second quarter from the previous three months, beating expectations, Reuters reported Monday. Thai Q2 GDP was up 3.5 percent on an annual basis, beating the median forecast of 3.2 percent, according to Reuters.

The better-than-expected GDP numbers are expected to boost investor confidence. The benchmark SET index in Thailand is already one of the best-performing Asia Pacific stock indexes year-to-date.

"The stronger than expected 2Q GDP data was likely supported by firm government and tourist spending through the quarter, as well as a moderate recovery in manufacturing sector momentum," said Benjamin Shatil, ASEAN economist at JPMorgan.

But looking past the boost from tourism and government spending, Shatil said the economy was still somewhat fragile which could indicate the possibility of "further monetary easing from the central bank."

In Australia, companies expected to release earnings include BHP Billiton, Wesfarmers, and Woodside Petroleum.

The country's unemployment data are also due on Thursday. RBC Capital Markets analysts said in a Friday note they expect the level of employment to be "down 20,000 in July relative to June."

"This reflects an unwind of the unusually strong outturns recorded in H2'15 ... we also look for a 0.1 percentage point dip in the participation rate to 64.8 percent, which could allow the unemployment rate to remain steady at 5.8 percent," the RBC analysts said.

On central bank watch, Bank Indonesia is expected to announce its monetary policy decision on Friday. Analysts believe the pressure on the central bank to support growth will persist.

"With inflation remaining tame, there is arguably room for further rate cuts," said DBS Bank analysts in a note on Friday. "The immediate impact from any further rate cuts, however, seems rather limited."

Starting from its August policy meeting, Bank Indonesia will introduce a new seven-day reverse repurchase rate which would be the new benchmark policy rate, replacing the current BI rate. The current seven-day reverse repo rate is at 5.25 percent.

Moody's Analytics said it expects the central bank to keep the reverse repo rate unchanged in August, but said it will "maintain its strong easing bias after cutting rates four times this year."

On tap this week:


Indonesia - July trade data

Earnings - Newcrest Mining, JB Hi-Fi, Langham, South Gobi


Australia - RBA policy meeting minutes

Earnings - BHP Billiton, China Resources Gas group, CITIC Telecom, MMG, HAECO, Bank of Jinzhou


Singapore - July non-oil domestic exports

U.S. - Federal Open Market Committee meeting minutes

Earnings - Cathay Pacific, Tencent, China Unicorn, Soho China


Japan - July foreign trade

Australia - July employment situation

Philippines - Q2 GDP

Earnings - Swire Pacific, Swire Properties, Geely Auto, Lenovo, Wynn Macau, China Merchants Bank


Indonesia - Bank of Indonesia interest rate decision

Earnings - Santos, China Vanke, Bank of East Asia, Huatai Securities, Haitong International

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