Asia seeing green after Aussie GDP

Asia equities rally on vaccines and Australian GDP

Equity markets are experiencing a wax on, wax off week, tail-chasing short-term momentum of whichever story carries the most weight on the day. Yesterday it was bubbles, which saw equity markets unwind part of the impressive rallies seen on Monday. The S&P 500 fell 0.81%, the Nasdaq plunged 1.60%, and the Dow Jones eased by 0.46%.

US vaccine manufacturing progress and an impressive Australian GDP print which was higher than expected has lifted animal spirits today, though. US index futures have recovered in Asian trading, with the S&P and Dow futures rising 0.35%, and the Nasdaq futures rising 0.55%.

That has greenlighted Asia to follow suit, and regional equity markets are performing strongly. The Nikkei 225 has risen 0.25%, a muted performance ahead of a government decision on extending Covid-19 restrictions. The Kospi, though, has risen 0.70%, and China’s markets are also rallying strongly. The Shanghai Composite has jumped 1.50%, the CSI 300 by 1.25%, and the Hang Seng has rallied 1.50% higher.

Regionally, Singapore is 0.55% higher, along with Taiwan. Kuala Lumpur and Jakarta are around 0.30% higher, and Australia’s ASX 200 and All Ordinaries are 0.75% and 0.65% higher, respectively.

Assuming no headline surprises, notably bubble ones from important people, hit the wires again today, Europe should follow Asia higher. Wall Street will be a harder one to call. US ADP Employment and ISM data should outperform tonight and Nonfarm Payrolls will be released later in the week. All are likely to surprise to the upside. Depending on Wall Street’s mood, it will be received as a recovery boost, so buy everything. Or, it will be inflationary; we are all doomed, so sell everything. I shall decline to predict Wall Street’s mindset; it has the same inherent dangers as assuming what Mrs Halley is thinking about, or so I have been told regularly. Either way. I end up scolded.

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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