By Jamie McGeever

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever.

Asia’s economic data and policy calendar this week is light, which is perhaps just as well because investors’ focus is firmly fixed elsewhere – the global banking crisis and what it means for growth, markets, and policy.

Some may balk at recent events being termed a ‘crisis’, but consider: two of America’s top 25 banks have collapsed; a global giant, Credit Suisse, has been swallowed up; worries over another, Deutsche Bank, are mounting; the Fed has taken emergency steps and provided backstops worth hundreds of billions of dollars.

Fears over deteriorating credit conditions are rising, despite the swift and bold action from U.S. and Swiss authorities. Fed and European Central Bank officials raised the warning flags on Sunday, echoing soundings from across the private sector last week.

This is the precarious backdrop to the final week of the quarter. The turmoil and volatility across interest rates and fixed-income markets since Silicon Valley Bank was shuttered by California regulators on March 10 has been severe.

Asia will not be immune. If safe-haven buying and rising demand for dollar liquidity and collateral pushes up the dollar, economies in the region will be under pressure.

Weakening domestic exchange rates push up price pressures, forcing central banks into a corner – tighten policy when growth is slowing, or allow inflation to rise? A stronger dollar also, all else equal, tightens financial conditions.

Currency market volatility has been surprisingly subdued since the banking crisis flared up. Maybe that is about to change.

Bank stocks have tumbled but stocks in general, and particularly the interest rate-sensitive tech sector, have held up better. More speculative corners of the investment universe, like Bitcoin and cryptocurrencies, have significantly outperformed.

The Nasdaq is up two weeks in a row, and still up 3% for the month, while Bitcoin is up 35% since SVB collapsed.

How much longer can they defy gravity? If bond yields and implied rates are plunging because a looming credit crunch makes recession far more likely, risk appetite is likely to change accordingly.

Perhaps the Fed and other central banks can achieve the holy grail of a soft landing, and take the seemingly contradictory policy steps of promoting financial stability and tackling inflation without any further ructions in the financial system.

Perhaps.

Trade figures from Hong Kong and Thailand are the main Asian data points on Monday. Later in the week Vietnamese GDP, a Thai interest rate decision, Japanese retail sales and unemployment are on the docket, while the preliminary PMIs for March across the continent – including China – start filtering in.

Here are three key developments that could provide more direction to markets on Monday:

– Germany Ifo index (March)

– ECB’s Schnabel speaks

– BoE Governor Andrew Bailey peaks

(By Jamie McGeever; Editing by Diane Craft)