Bulls in a China shop

By Jamie McGeever

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

Asian stocks are on track for a third weekly decline, their worst run since October, but two corporate earnings reports from China on Friday could give investors an idea about the scale of the recovery in the region's largest economy this year.

The conventional wisdom holds that a resurgent China will be inflationary for the global economy as demand for energy, commodities and resources increases. But that may not be the case.

Lenovo Group, the world's largest maker of personal computers, and gaming firm Sands China release their latest results on Friday, with investors keen to hear positive guidance now that the country is opening up from its zero-COVID lockdown.

The MSCI Asia ex-Japan index is on course for its third weekly fall, a cold reality check on the heels of a five-week winning streak. Chinese stocks are also on track for a third weekly fall, snapping a winning run of four.

(Chinese stocks - weekly change https://fingfx.thomsonreuters.com/gfx/mkt/zgvobkozypd/ChinaStocks.png)

Lenovo will be hoping for a rebound following its 4% revenue decline in the July-September period, its first fall in 10 quarters.

There are already indications that the outlook for Sands China is brightening - gambling revenue in Macau surged more than 80% in January and shares of Macau gaming companies like Sands China have more than doubled in the past three months.

The latest economic indications from China are also encouraging. New bank loans jumped more than expected to a record 4.9 trillion yuan ($720 billion) in January. Seasonal factors are at play, but the quantity of new loans still more than tripled from December.

(Chinese new bank loans https://fingfx.thomsonreuters.com/gfx/mkt/jnpwyxmbbpw/ChinaLoans.jpg)

The People's Bank of China (PBOC) has been ramping up liquidity injections this year to assist the post-COVID recovery, and loan growth is expected to continue also.

The PBOC is scheduled to set its lending benchmark interest rates on Monday morning. The PBOC kept benchmark lending rates unchanged for a fifth month in January as expected, but analysts say there may be scope for easing.

The one-year loan prime rate - on which most new and outstanding loans are based - is currently 3.65%, and the five-year rate - considered a reference rate for mortgages - is 4.30%. China last cut both rates in August.

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

- Thailand GDP (Q4)

- Fed's Barkin and Bowman speak

- UK retail sales (January)

(By Jamie McGeever; Editing by Josie Kao)