Financial Conditions Bite as Asian Markets Retreat and Wall Street Closes Higher

Asian markets are expected to open nervously as concerns grow over last week's equity selloff, tightening financial conditions, and upcoming economic data from China. The G20 summit in India is unlikely to have a significant market impact, with U.S.-China tensions dominating politically-influenced trading. Broader market sentiment is fragile, with major indexes experiencing declines. Financial conditions in China, emerging markets, and globally are the tightest since last November, driven by high bond yields and a strong dollar. Currencies in Asia are feeling the heat, and key economic indicators across the region will provide further direction. China's economic data dump this week will shed light on the state of its economy and the challenges authorities face in achieving their GDP growth target. However, the depreciating yuan poses a risk to further policy easing.