Soft data leaves Asian equities cautious

Asian markets are having a mixed day

Asian equities are having a very mixed day after stocks in the US ended the quarter on a soft note, although quarter-end flows may have muddied the price action. The S&P 500 fell 1.57%, the Nasdaq fell 1.54%, and the Dow Jones fell 1.56%, even as US yields eased on quarter-end buying and on target US data. In Asia, some of those moves have been immediately reversed, with futures on all three indexes rising around 0.50% today.

The picture in Asia is rather more mixed. Soft PMI data from across Asia and a weak close overnight have been offset somewhat by US futures rallying in Asia. Overall, though, Asia is trading with a slightly negative tone and appears content to wait for the US employment data this evening.

One glaring exception is mainland China’s equity markets which are rallying strongly today. The Shanghai Composite is 0.70% higher, while the CSI 300 has rallied 1.30%. That is despite Caixin PMI data disappointing and tightening Shanghai lockdowns. China markets could well be seeing portfolio inflows from investors related to the start of the quarter or some assistance from China’s “national team” to “smooth” markets. Notably, Hong Kong has fallen 0.75% today as Modern Land and Evergrande NEV suspended stock trading, possibly over audit delays.

Elsewhere, the Nikkei 225 has fallen by 0.40%, with South Koreas Kospi losing 0.50%. Taipei is 0.75% lower, with Singapore unchanged and Kuala Lumpur 0.35% higher. Jakarta and Bangkok are flat. Australian stock markets have booked modest gains, the ASX 200 and All Ordinaries edging 0.10% higher.

European equities slumped once again yesterday as potential energy shortages sapped sentiment once again. None of the overnight developments, including President Putin’s signing of a “pay in roubles or no gas” order will make the landscape any happier for European equities. I expect them to remain heavy today before we move into the directional turkey shoot known as the US Non-Farm Payrolls.

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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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