Aug 30 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever As tightening financial conditions continue to choke investor sentiment and slam global stock markets, good old-fashioned PMI data from China will set the tone for Asian markets on Wednesday.
Relief from the current gloom might be in short supply.
China's manufacturing sector, once the world's economic growth engine, has been barely growing or outright contracting for a year. Economists expect the August purchasing managers index to stay below the growth/expansion threshold of 50.0 once again.
The services PMI has held up a bit better recently but the wider economy is creaking, especially the property sector - earnings reports from five of China's largest banks on Tuesday showed a huge rise in bad debts linked to real estate in the first half of the year.
The yuan pulled back from a two-year low against the dollar on Tuesday, but remains vulnerable. The greenback is on a roll - Fed rate hike expectations continue to strengthen, and markets are close to pricing in a fed funds rate of 4.00% next year.
Wall Street's three main indices closed in the red and world stocks fell again Tuesday, global bond yields rose, and the dollar rose. Put that together, and you get a pretty rapid tightening of global financial conditions.
Some key economic indicators from Japan and South Korea could also steer local markets on Wednesday. Industrial output in both countries is expected to fall in July from the month before, and Japanese retail sales are on the docket too.
Key developments that should provide more direction to markets on Wednesday:
China PMIs (August)
Japan industrial output (July)
Japan retail sales (July)
S Korea industrial output (July)
S Korea services sector output (July)
S Korea retail sales (July)
Australia money supply lending (July)
(Reporting by Jamie McGeever in Orlando, Florida; Editing by Jonathan Oatis)