Asian stock markets recovered in overnight trading on the back of better-than-expected economic data from the world’s second-largest economy, China.  

Industry, investment, services and retail sales all showed growth, according to China’s official statistics.  

The Asian giant contributes around 30 percent to global GDP growth and is a major driver of Asia’s economies. The Hang Seng Index and Nikkei rose on the latest macro-economic developments, signaling a lift in sentiment after recent COVID-19 outbreaks in Shenzhen.  

Crude oil and natural gas spot prices slowed their rapid retreats from last week's highs as traders priced in the possibility that China’s growth will boost world GDP - and demand for fuel in the short-to-medium term.  

FOMC interest rate decision 

All eyes are on the FOMC’s rate decision expected later today.  

Spot gold prices remain under pressure as the inversely-correlated USD takes the safe-haven spotlight following high inflation rate numbers for February.

If the Federal Reserve raises its key interest rate by .25 basis points to .50 as widely expected, there could be knock-on effects for assets like gold, the USD currency pairs, the US Dollar Index and banking stocks. 

What if the FOMC does not raise interest rates as expected?

Monetary policy makers are well aware that current inflation rates reflect extraordinary economic conditions amid the COVID-19 pandemic. Raising interest rates at a time of slower economic growth may increase the chances of defaults in the corporate and household sectors. 

This means there is a slight chance that the Federal Reserve might choose to increase tapering quantitative easing (QE) instead of raising interest rates. In that case, the US stock markets could see support as the cost of borrowing and investing would remain at accommodative levels.  

In other news, US retail sales numbers for February are expected today. At a macro-economic level, retail sales figures can influence expectations towards inflation, jobs and GDP growth. At the asset level, the USD and retail stocks may see movements depending on investor reactions to the numbers.