US futures rally eases Asia equity pain

Asian markets calm

Asian equities are lower today, but only modestly so in the context of this week’s volatility globally. For that, they can thank the after-market buy-the-dip FOMO gang, who have lifted US index futures higher this morning after the overnight omicron sell-off. In the OTC session, Wall Street took a bath as the first US omicron case was detected. The S&P 500 fell by 1.18%, the Nasdaq tumbled by 1.83%, with the Dow Jones retreating 1.38% lower.

 

In Asia, US index futures have risen sharply. S&P 500 futures are 0.55% higher, Nasdaq futures are up 0.45%, and Dow Jones futures have jumped by 0.65%. I can see no obvious reason for the futures rally, other than Dr Anthony Fauci saying don’t alter travel plans and that he hopes the US omicron travel restrictions can end soon. As good a reason to turn wildly bullish as any this week I suppose.

 

That has taken the edge of the potential negativity in Asian markets following the overnight slump by Wall Street. Asian markets are mostly lower, but not drastically so. The Nikkei 225 has fallen by 0.60%. Rising virus cases, new border restrictions, a postponed domestic easing of restrictions and rising inflation hasn’t dented the Kospi, which has rallied 0.95% today with technology and electronics leading the charge as local investors dust of the work-from-home trade.

 

Mainland China is sedate with the Shanghai Composite unchanged, while the CSI 300 is up just 0.35%. Hong Kong is just 0.25% higher although property heavyweights are outperforming as companies move to issue more debts domestically, easing liquidity crunch fears.

 

Around the region, Singapore is 0.17% lower while tech-heavy Taipei is following the Kospi lead, rallying by 0.75%. Kuala Lumpur is flat with Jakarta 0.70% higher and Bangkok falling by 0.25%, with Manila, dominated by a small number of heavyweights, has leapt 1.25% into the green. Australian markets have unwound some of their earlier losses as South Australia tightened internal border restrictions, following tightened international restrictions. The rally in US indexes has lifted local markets, leaving the All Ordinaries down just 0.30%, while the ASX 200 is just 0.10% lower.

 

Equity markets continue to play omicron tennis and traders looking for short-term direction, should just wait for the next virus headline and then act accordingly. As I have said previously, volatility, and not market direction, will be the winner this week.

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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