Asian equities edge higher

Asia in cautious mood, eyes US GDP

Asian equities continued to trade with a cautiously bullish bias, with one eye on US GDP this evening, after the FOMC stayed on message but was ever so slightly less dovish. Notably, US index futures are rallying powerfully in Asian trading after blow-out Apple and Facebook results and after President Biden’s address to Congress passed without incident. Yet, Asian markets are refusing to join in.

 

On Wall Street overnight, a slightly less dovish FOMC statement if you looked very closely word-for-word pushed markets lower. The S&P 500 finished almost unchanged at 0.08% lower, the Nasdaq slid 0.28%, while the Dow Jones fell by 0.48%, weighed down by Boeing woes. All has been forgiven in Asia, though, with S&P futures rising 0.60%, Nasdaq futures leaping by 0.95%, and Dow Jones futures rising 0.30%. The US earnings deluge continues today, although all eyes will be on Amazon’s results. If this week’s form continues, a result close to expectations will see Amazon stock fall, while markets will reward a strong earnings beat.

 

In Asia, the Nikkei 225 and Kospi are 0.30% higher while China’s CSI 300 is up 0.20%, with the Shanghai Composite unchanged. The Hang Seng is 0.65% higher as retail investors pile into China tech listings, while Taipei has climbed 0.40%.

 

Singapore and Kuala Lumpur have risen 0.15%, with Jakarta 0.25% higher. Australian markets are following US futures higher, the All Ordinaries is increasing 0.45%, while the ASX 200 has climbed 0.30%. This week’s best performer has been India’s Sensex, which is up 3.35% for the week. Both the Indian rupee and Sensex have benefited from buy-the-dip fast money flows, highlighting the wall of money globally looking for a home. With investors looking past the Covid-19 situation, rightly or wrongly, a dovish FOMC should see that trend continuing this afternoon.

 

Although Asia is gently bullish as US index futures power higher, I expect the cautious tone to continue ahead of US GDP and China’s Manufacturing and Non-Manufacturing PMI’s tomorrow. Three-day holidays in China and Japan next week are likely to dull activity after the China PMI release. With a tier-2 data calendar in Europe today, I expect markets to remain in US GDP wait-and-see mode also.

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
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is 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, Channel News Asia as well as in leading print publications including 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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