Asian markets eye Chinese data
Wall Street equity markets rose overnight as confidence returned to some degree following a previous torrid week. The S&P 500 rose 1.27%, the NASDAQ rose 1.87%, and the Dow Jones rose 1.16%. The impressive overnight session was driven by the return of the herd, as much as it was vaccine news or M&A mania.
Asia is somewhat more circumspect ahead of China’s data releases today; it also being the deadline for TikTok to have divested its US operations. A stronger yen sees the Nikkei 225 edge 0.70% lower with South Korea Kospi flat for the session so far. In China, the Shanghai Composite and CSI 300 have edged 0.50% higher with Hong Kong unchanged. Australian markets are flat ahead of the China data.
Singapore has risen 0.65% following the announcement that Tencent has chosen the City-state as its Asia hub. With unemployment at record highs by Singapore standards, this will be seen as a welcome shot of confidence in the local market and follows a series of recent wins on that front by Singapore in recent times.
Asian equity markets appear content to adopt a wait-and-see attitude today, ahead of a heavy data schedule as the week rolls on and plenty of central bank risk.
Germany’s ZEW Economic Sentiment Survey will be the focus of the European session. The September release is expected to fall slightly to 69.80, but with Covid-19 surging again across the single market, a larger than expected decline could weigh on European equities.
Overall, the buy everything FOMO trade is carefully testing the waters after being giving a harsh lesson in two-way price action last week. We can expect to see the gentle ascent for equities continue ahead of an expectedly dovish FOMC decision, with only occasional headline-driven short-term volatility likely to rock the boat.
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