Wall Street’s rally pushes Asia upwards

Asian equities power higher as China returns

Wall Street’s rally continued into a third day overnight after the US Senate agreed to a temporary extension of the US debt ceiling until early December. The S&P 500 rose by 0.83% while the Nasdaq powered 1.03% higher, and the Dow Jones rallied 1.0% higher. Futures on all three, in keeping with the past few days, have continued their rally in Asia. Futures on all three are up by around 0.20%.

 

That has set Asia up for a positive start to the day with the return on mainland China markets having no particular event risk. Combined with the announcement of a post-election supplementary budget, the Nikkei 225 has leapt higher by 2.05%, although the Kospi has risen just 0.35% despite impressive Samsung earnings.

 

Mainland China markets have also rallied strongly on their return, with the Evergrande situation temporarily off the front pages. The Shanghai Composite has jumped 2.0% higher while the CSI 300 is up an equally impressive 1.35% in what appears to be a case of no news is good news. Property nerves are weighing on Hong Kong though after Fantasia, which defaulted this week, had trading in its bonds suspended. The Hang Seng is down 0.20% today.

 

In regional markets, Singapore has edged 0.25% higher while Taipei, perhaps with one eye on President Xi’s speech on Taiwan this weekend, has fallen slightly, down 0.15%. Kuala Lumpur is 0.25% higher, but Jakarta has jumped by 1.0% Bangkok is 0.65% higher with Manila soaring by 1.65%.  In Australia, the All Ordinaries and ASX 200 have climbed by 0.75%.

 

With the overnight rally continuing into Asia, European markets are set for another positive opening this afternoon, having ignored weak German data yesterday. We are likely to see some position squaring ahead of the US Non-Farm Payrolls data, however, and that will probably limit gains. The US non-farm payroll report is the pivotal moment of the week for markets and will give a very binary outcome if the data diverges from market forecasts of 500,000 jobs added.

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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