Asian equity markets are off to a strong start

No news is good news

The new trading week has started out on a positive note. Taking a look at the Asian markets, equities have leapt higher on Monday morning, along with US Index Futures, as the ‘no new news is good news’ trade resumes. The Bank of Japan increasing its targeted 5 and 10-year JGB buying targets proves yet again that global central banks have got investors’ backs. That has ensured the Nikkei 225 is off to a positive start, rising 1.55% today.

The Kospi is up by 0.80%, boosted by a jump in LG Electronics. Over in China, the financial sector and real estate stocks are leading the way higher yet again, in a repeat of Friday’s price action. The Shanghai Composite and CSI 300 have risen by 2.0%.

US equity futures have joined in the fun, with the retail herd jumping onto the early-week upward momentum, probably having come in from their Sunday BBQ’s. The S&P mini and Nasdaq futures have risen 0.50%.

Across Asia, the story is much the same, with the week kicking off with gains. The Hang Seng has jumped 2.0% with its mainland counterparts. The Straits Times is up 0.80% with Kuala Lumpur up 1.05%. The only blot has been in Australia. Covid-19 is weighing on sentiment after New South Wales announced it would close its border with Victoria, and new cases continued to rise in Melbourne.


US Non-Manufacturing PMI expected to rise

With some clear upward momentum to equities as the week starts, only an ugly headline bomb could ruin the party. That sentiment is likely to continue through Asia today and into Europe and the US, with no economic data of note that could upset the applecart. In the US, the focus is on the services sector, with the release of Non-Manufacturing PMI this evening. The PMI has recorded two successive releases below the 50-level, which points to contraction. The index improved to 45.4 up from 41.8 beforehand. The upswing is expected to continue, with an estimate of 50.0 for the June release.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific, from 2016 to August 2022
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley was OANDA’s Senior Market Analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV and Channel News Asia as well as in leading print publications such as The New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

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