Asian markets mixed as NFP looms

Asian equities mixed ahead of US data tomorrow

Asian markets are having a mixed day, with a bias to the downside, as regional investors digest the latest Chinese government clampdown of the day and look to reduce exposure into tomorrow’s US Non-Farm Payroll release. Overnight, there was also a sense of positioning for safety as US technology outperformed in what was otherwise a slightly negative session after the US ADP and ISM PMI data.

The S&P 500 finished just 0.03% higher, while the Nasdaq rose by 0.33%, with the Dow Jones edging 0.13% lower. Futures on all three are slightly negative in directionless Asian trading.

In Asia, the Nikkei 225 has risen 0.30% after BoJ Board member Kataoka said the Japan recovery was not fast enough and the BoJ could ease further. In South Korea, the Kospi has fallen by 1.05% after higher than expected inflation data raised the spectre of further central bank tightening.

China’s summoning of 11 ride-hailing firms for a meeting has not impacted the main Shanghai Composite index, which is 0.50% higher, but has seen the CSI 300 fall by 0.33% with Hong Kong treading water, up by just 0.15% today. Singapore’s Straits Times has edged 0.17% lower, with Taipei down 0.55%, Kuala Lumpur easing by 0.14%, and Bangkok unchanged.

Australian markets have taken fright at warnings by the Australian medical establishment that they are not ready for a deluge of Covid-19 cases once the economy reopens. Fears that today Q2 Balance of Trade will be a high-water market for the economy, much of it in lockdown in Q3, also seem to be weighing heavily. The ASX 200 has fallen by 0.80%, with the All Ordinaries lower by 0.60%.

Equity markets appear to be reacting to a combination of local headlines and pre-US-data positioning adjustments on a slow news day. Assuming the same pattern of behaviours, I expect European markets to open on the heavier side, especially as inflation-fighting rhetoric is getting louder from the ivory towers of central bank intelligentsia.

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