Equities positive in Asia today

Despite the difficult economic conditions being felt worldwide, the equity markets continue to head higher. Equity markets have received a boost from reports of progress in the global race to find a vaccine for the Corvid-19 pandemic. As well, strong economic data in the US and Asia has been a welcome respite for investors, who are anxious for positive news in these uncertain times.

Vaccine hopes and almost universally positive global PMI data overnight, as well as a robust US ADP Employment number, propelled Wall Street stock markets onwards and upwards. Only the Dow Jones lagged, as the party in Boeing stocks ends as quickly as it started, however it only fell 0.30%. Elsewhere though, the S&P 500 rose 0.50%, while the Nasdaq reached new record highs, climbing 0.95%.

All eyes are on Thursday’s US employment data, which will be released a day early due to US Independence Day.  One of the most important market movers, non-farm payrolls is projected to climb to 3.037 million, up from 2.509 million. Unemployment claims are expected to drop for a 13th consecutive week, to 1.350 million. The unemployment rate is expected to drop, to 12.4 percent.

The fly in the ointment could be wage growth, with analysts braced for a decline of 0.8% in average hourly earnings, which follows a 1.0% decline in the previous release. Still, if the job numbers are within expectations, equities should respond with gains.

Asia has duly followed suit in anticipation of robust US labour market data this evening, with Hong Kong concerns temporarily forgotten. The Nikkei 225 is up by just 0.30%, as Tokyo reports more than 100 new Covid-19 cases. The Kospi however has risen 0.95% with Mainland China’s Shanghai Composite and CSI 300 both 0.75% higher.

Regionally, Hong Kong has returned to work, with the Hang Seng up 1.30% today. The Straits Times has eked out a 0.20% gain, with the eternal optimists of Australia propelling the ASX 200 and All Ordinaries higher by 1.0%, as the Australian trade data passed without incident.

With markets vaccinating themselves over US Covid-19 worries and geopolitical concerns, they are back in peak-virus, buy everything mode. That will continue into Europe with only a severe downward surprise in the US data dump this evening likely to upset the narrative.

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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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