Taper trade sees mixed results in Asia

Powell renomination weighs on Wall Street

Wall Street had a torrid session overnight as US long-dated bond yields jumped higher after the renomination of Jerome Powell as Federal Reserve Chairman. Rate-sensitive technology stocks slumped pushing the Nasdaq lower. Meanwhile, banking stocks rose in sympathy with a steeper yield curve, which bodes well for future profitability, while a rise in commodity and oil prices boosted the mining and energy sector. The S&P 500 fell by 0.32%, with the Nasdaq retreated by 1.26% as the Dow Jones edged 0.05% higher. Futures on all three are almost unchanged in Asia.

With Japan on holiday today, the price action in US markets is being broadly repeated in Asia. Tech-heavy indices are suffering while those with more traditional resource, banking and property weightings are holding their own. South Korea’s Kospi is down 0.45% with Taipei falling by 0.35%.

Mainland China sees the Shanghai Composite rising by 0.35%, aided by reports of renewed lending to the property sector. The more tech-centric CSI 300 remains unchanged though. Hong Kong has seen locally listed mainland China tech-titans sold heavily, pushing the Hang Seng down by 0.75%.

In regional markets, Singapore has eased by 0.10% with Kuala Lumpur edging 0.15% lower and Jakarta easing by 0.30%. Bangkok has risen by 0.15% with Manila jumping by 0.65%. In Australia, the rise in US yields overnight, and rallies in oil, iron ore and coal, have lifted the bank and resource sector. That has pushed the All Ordinaries 0.55% higher, while the ASX 200 has rallied by 0.75%.

The Covid-19 hangover in Europe is likely to continue today, although a lower euro should take the edge of exporters. Weaker than expected PMIs from Germany and France could well deepen the malaise and raise fears that the European recovery faces a number of challenges.

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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