Asian equities are mixed

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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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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