Asian equities tread water

US equities surged overnight as Elon Musk’s Twitter stake announcement sent its shares 27.0% higher, with Tesla rallying by over 5.0%. Where Elon goes, the rest of us follow, and the battery-powered billionaire managed to lift all of Wall Street. The S&P 500 rose by 0.81%, the Nasdaq leapt 1.90% higher, while the Dow Jones added 0.30%. Futures on all three have edged 0.10% lower in Asia as fast money books profits.

China Covid spike weighing on Asian markets

A mainland China and Hong Kong holiday, with Taiwan also out, has set Asia up for a quiet day. Any bullish overspill from Wall Street is being offset by increasing nerves around China’s covid situation. Cases have spiked to 13,000 and the lockdown has been extended indefinitely. That is probably one factor weighing on Asian markets today, China holidays aside. Fears are increasing that China’s Covid-zero policy could lead to wider and more extended shutdowns in the face of omicron, something that will not only impact China and Asia’s growth but have knock-on effects around the world.

Japan’s Nikkei 225 is flat, while South Korea’s Kospi is down 0.10%. Singapore is 0.35% higher, Kuala Lumpur is down 0.20%, Jakarta is up 0.15%, Manila has lost 0.65%, and Bangkok is 0.25% higher.

Australian markets have risen pre-RBA, expecting zero chance of a rate hike today and content to follow Wall Street’s lead from overnight, helped along by the recovery in oil prices. The ASX 200 and All Ordinaries have rallied by 0.60%. Expect some volatility after the RBA policy statement.

European markets rose yesterday, despite energy concerns, as the German Trade Balance rose to EUR 11.4 bio, blowing expectations out of the water. With oil now 5.0% higher than yesterday morning, European markets will struggle to repeat that feat today.

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Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific, from 2016 to August 2022
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley was 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 and Channel News Asia as well as in leading print publications such as 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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