Asian equities continue to rally

Chinese trade data lifts Asian markets

With the overnight treasury auctions passing without incident, Wall Street equities continued to rise modestly. The street is pricing in no US CPI surprises and anticipating another solid quarterly earnings season kicking off this week. The S&P 500 rose 0.35%, the Nasdaq by 0.21%, and the Dow Jones by 0.37%, with the futures in Asia settling into a pre-CPI waiting game.

That was enough on its own to greenlight a positive start to trading in Asia, which has been boosted by impressive China trade data this morning as well.  The June surplus rose to $51.50 billion, with June Exports YoY increasing 32.20%, and June Imports YoY increasing by 36.70%, crushing the consensus forecast. The robust China trade data will be a shot in the arm for Asia, though, and a sense of relief across the region will be palpable, as positive news is certainly needed with the resurgence of Covid.

Japan’s Nikkei 225 and South Korea’s Kospi have both climbed 0.75% higher today. Mainland China’s Shanghai Composite and CSI 300 have edged 0.30% higher, with no signs of clampdown nerves showing today.

Hong Kong’s Hang Seng has leapt by 1.60% after Tencent gained unconditional approval from the Chinese Government to complete an acquisition. Singapore and Taipei have risen 0.75%, with Kuala Lumpur and Bangkok climbing 0.35%, while Jakarta has edged 0.10% lower following the BI growth downgrade.

The prospect of an extended lockdown in Sydney has not dented confidence in Australia, with resources and banks outperforming and a federal support package announcement imminent for NSW. The ASX 200 has risen 0.20%, while the All Ordinaries is 0.40% higher.

European stock markets should follow the default setting from Wall Street and Asia and rise gently at the commencement of trading. Only a surprise jump in German and French inflation data is likely to crack confidence ahead of the US inflation data later this evening. Otherwise, I expect equity markets to market time ahead of that release.

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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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