- Asian markets have rebounded after witnessing a bloodbath last week.
- The risk-on impulse has returned as a repulsive buying, not a reversal.
- The odds of sellers returning to their terminals are very high.
The vulnerable Asian markets have turned positive this week after the turmoil seen in the last week of February. The escalation in the Russia-Ukraine war forced the market participants to ditch the risk-sensitive assets and park their funds into safe-haven assets. Asian stocks take the bullet and nosedive strongly.
The chatters between the Kremlin and Ukraine on Monday to ceasefire brought a fresh wave of risk-on impulse in the market. Although the negotiations ended without any outcome, an initiative for a truce had been welcomed by the market.
Moreover, China’s upbeat Caixin Manufacturing PMI has also supported the Asian markets. The Caixin Manufacturing PMI has printed at 50.4 higher than the previous print of 49.1 and market estimates of 49.3. Despite the lower economic activity in China during the Lunar New Year when factories remain closed, Jinping’s economy has outperformed.
However, the recent surge in the Asian markets should be tagged as repulsive buying, not a reversal. The world is now aware of the arbitrariness of Russian President Vladimir Putin and the man is not going to give up easily despite building up sanctions from the Western leaders. The isolation of Russia from the SWIFT international banking system has crippled its economy by restricting its oil and energy exports.
If any positive development relating to a ceasefire between Russia and Ukraine flashes then the Asian markets will move north like there is no tomorrow. Until it happens, the odds of sellers returning to the terminals soon are very high.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD hovers around 1.0750 with a negative sentiment amid hawkish Fed
EUR/USD could extend its losses for the third successive session, trading around 1.0750 during the Asian session on Thursday. The US Dollar appreciates amid expectations of the Federal Reserve’s maintaining higher interest rates.
GBP/USD holds below 1.2500 ahead of BoE rate decision
GBP/USD extends its losing streak for the third successive session, trading around 1.2490 during the Asian session on Thursday. Thursday brings the Bank of England interest rate decision, with expectations of maintaining interest rate at 5.25%.
Gold price gains momentum, investors await US data, Fedspeak for fresh catalyst
Gold price holds positive ground in Thursday’s Asian session. The rise in global gold demand, persistent central bank purchasing, and safe-haven flows might continue to boost the precious metal.
President Biden threatens crypto with possible veto of Bitcoin custody among trusted custodians
Joe Biden could veto legislation that would allow regulated financial institutions to custody Bitcoin and crypto. Biden administration’s stance would disrupt US SEC’s work to protect crypto market investors and efforts to safeguard broader financial system.
BoE set to leave interest rates unchanged amid increasing expectations of cuts
It's anticipated that the BoE will maintain the benchmark interest rate at 5.25% after its policy meeting today at 11:00 GMT. Alongside the policy rate announcement, the bank will release the Monetary Policy Minutes and the Monetary Policy Report.