Equities fall with US futures

US markets higher, but Asia quiet

Asian markets are following the dentists of Minnesota this morning, who have sold US index futures this morning after no new stimulus package appeared from Washington DC. US data had lifted stocks in New York time with the S&P 500 rising 0.56%, the Nasdaq climbing 1.44% and the Dow Jones edging 0.17% higher.

Hopes fade over stimulus deal

There had been growing hopes over the past few sessions that the US Republicans and Democrats were edging closer to a new fiscal stimulus package, but it appears that a sense of Deja vu has swept markets this morning. By my calculations, the stimulus spread was at $1.6 trillion/$2.2 trillion as of yesterday, far apart, but less insurmountable then previous weeks. Unfortunately, it appears there is no sign that either the Democrats or the Republicans are prepared to cross the spread, or even meet in the middle ahead of a soft Thursday deadline US time. That has seen US equity index futures fall this morning in Asia and has dampened sentiment across the region.

Overnight, the US data showed that the economic recovery remained intact, albeit at a slowing pace, mostly due to the impasses described above. ISM and Market Manufacturing PMI’s and sub-indexes outperformed. Initial and Continuing Unemployment Claims both dropped again, notably the continuing component, which fell by 1 million. One note of caution in these figures is that California is not contributing data to these numbers for two weeks, and thus, they could be subject to some significant revisions.

Tokyo has reopened after being closed all day yesterday with technical problems. The Nikkei 225 falling 0.40% this morning. Singapore has edged 0.35% lower while Sydney’s schizophrenic price action continues. Banks and resources led Australia higher yesterday; both sectors have been thrashed this morning, leaving the ASX 200 and All Ordinaries down 0.75%.

Tail chasing by Australian markets aside, with so much of Asia on holiday today, the session is likely to remain a quiet one ahead of US data this evening, with all eyes on the Nonfarm Payrolls 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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