Asian markets mixed ahead of FOMC
US markets were mixed but relatively calm overnight, as Wall Street consolidated after brutal previous sessions. The S&P 500 finished 0.37% lower, while the Nasdaq climbed by 0.18%, with the Dow Jones fell by 0.47%. In Asia, US index futures are seeing some decent pre-FOMC short-covering. S&P 500 futures are 0.40% higher, Nasdaq futures gaining 0.55%, with Dow futures adding 0.25%.
Asia has responded unevenly, despite today’s data releases erring to the positive side. Mainland China markets are outperforming once again, but Japan’s Nikkei 225 has fallen by 0,85%, with South Korea’s Kospi losing 1.55%, and Taipei edging 0.25% lower.
Mainland China is rallying strongly after improving data this morning. The Shanghai Composite has climbed 1.40% higher, with the CSI 300 jumping by 1.85%. Mainland markets staged a mysterious comeback yesterday afternoon and given that three small banks have frozen deposits in China, the rally is even more surprising. Unlike the hapless depositors protesting outside the banks, I suspect that Chinese authorities have turned China’s “national team” health apps “green,” instructing them to go forth and buy. Not to be outdone, Hong Kong’s Hang Seng has also risen by 1.25% today.
Elsewhere, Singapore has risen by 0.60%, but Kuala Lumpur has fallen by 1.50%, along with Jakarta, down 1.0% today. Bangkok has lost 0.50%, with Manila losing 0.60%. Australia is also in the red, the All Ordinaries and ASX 200 both falling by 0.75%.
Except for China, is it interesting that the rest of Asia is completely ignoring the rally by US index futures today, even Australia. That suggests to me that Asian investors are overweighting on cash ahead of the FOMC tonight. It wouldn’t surprise me in the least if early Europe follows the same wise course and lightens positioning as well.
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