Asian stocks follow Wall Street higher

Asian markets edge higher ahead of NFP release

Wall Street shrugged off some hawkish rhetoric from the FOMC members’ rent-a-crowd overnight, myopically sticking to a recession equals lower rates equals buy stocks mantra. With nothing else to shake that tree, I can’t blame them for their enthusiasm. The buy-the-dippers piled into the growth trade, despite oil and US yields rising. The S&P 500 rallied by 1.50%, with the Nasdaq leaping by 2.28%, and the Dow Jones gaining 1.12%. In Asia, some profit-taking is occurring, pushing futures on all three indexes down by around 0.20%.

In Asia, the Abe shooting wiped out the early rally by the Nikkei 225, which is now unchanged on the day. South Korea’s Kospi has also given back some gains but remains 0.85% higher. Mainland China has barely reacted to either Wall Street overnight, or the China bond issuance story. The Shanghai Composite and CSI 300 are up just 0.20%, while Hong Kong’s Hang Seng Index is just 0.40% higher.

Elsewhere, regional Asia is also booking modest gains as markets appear to be more cautious ahead of the US Non-Farm data tonight and the usual weekend event risk. Singapore is 0.30% higher, with Taipei rising by 0.75%, Kuala Lumpur by 0.50%, and Jakarta by 0.70%. Bangkok is flat while Manila has outperformed again, jumping higher by 1.55%. A slight recovery by resource prices overnight, and a strong Wall Street session, see Australia’s All Ordinaries rising by 0.60%, while the ASX 200 has added 0.35%.

European markets had another day of outsized gains overnight as oil prices slumped, the Norwegian oil strike was averted, and a slumping euro boosts the Eurozone’s export prospects. Oil’s sharp reversal higher in New York will limit those ambitions today for Europe, and I am expecting just a modestly positive open as they also wait for the US data. UK equities rose on PM Johnson’s resignation yesterday, but it seems more like a protest vote, and not a structural turn in sentiment.

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, 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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