Asian equities are off to a strong start
Yesterday’s close by the Nikkei 225 above 30,000, last seen in 1990, appears to be spurring more buyers into the markets this morning, helped along by Bank of Japan Governor Kuroda. Mr Kuroda stated today, that the BoJ wouldn’t seek to exit or stop its buying of ETF’s, which form part of its ongoing quantitative easing programme. That has lifted the Nikkei 225 by an impressive 1.40% today.
US index futures have crept higher by around 0.15% with most of Asia in the green, although showing less exuberance than Japan. The Kospi has risen by 0.20%, and with Hong Kong returning from holiday, the Hang Seng has played catch-up, powering 1.70% higher today. Singapore has drifted 0.30% higher, with Kuala Lumpur edging 0.15% higher and Jakarta has climbed 0.80% as expectations of a Friday rate cute rise. Bumper results from BHP have lifted Australian markets, along with dovish RBA minutes. The All Ordinaries are 0.50% higher, and the ASX 200 has risen by 0.40%.
Elsewhere, industrial metals remain firm suggesting that the global recovery trade has yet to suffer any new-variant Covid-19 wobbles. Platinum has risen 2.20% in Asia today, following a 4.0% gain yesterday, indicating a massive pent-up demand for catalytic converters is coming.
Germany releases ZEW Economic Sentiment Index later on Tuesday, which will be the highlight of the European session. It is expected to show lockdown fatigue, something prevalent in EU data of late, with the Eurozone well behind the curve on the vaccination front. By contrast, UK markets should continue to outperform as the rapid vaccination pace has markets scrambling to reassess Britain’s recovery outlook.
Although not showing quite the same momentum as yesterday, a combination of dovish central banks, and the ever-present US stimulus and vaccine hopes have kept equity markets in business as usual mode. With the data calendar ultra-light, only a headline surprise could threaten the buy everything narrative in the near-term.
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