|

Asian Stock Market: Chinese bulls fall short of renewing market optimism

  • Asian equities trade mixed despite China’s hawkish start to the week after Lunar New Year holidays.
  • Upbeat US jobs report keep equity bulls away, geopolitical concerns over Russia play their role as well.
  • Indonesia GDP came in upbeat, Australia to open national borders for all double-vaccinated visa holders.

Asian equity markets fail to cheer China’s return from a long break as upbeat US jobs report keep Fed hawks on the table. Adding to the mixed concerns are fears of the Russia-Ukraine war and an absence of major data/events during Monday morning.

That said, MSCI’s index of Asia-Pacific shares outside Japan drops 0.20% intraday while Japan’s Nikkei 225 declines 0.80% heading into Monday’s European session.

Australia’s ASX 200 print mild intraday losses as traders struggle between softer China Caixin Services PMI and Aussie PM Scott Morrison’s border opening plans from February 21. Further, New Zealand’s NZX 50 remains lackluster while Indonesia’s strong Q4 GDP fails to impress traders.

Further, South Korea’s KOSPI drops 0.30% while India’s BSE Sensex drops 0.60% on a day at the latest.

Above all, Chinese stocks are mostly up near 1.0% intraday by the press time as market players welcome the latest comments from China suggesting easy money policies to remain on the table. Also favoring equities from Beijing are downbeat prints of China Caixin Services PMI for January and hints of more market liquidity to battle the hawkish hints from major central banks. In doing so, China’s equity bulls ignore recently downbeat signals over the Sino-American trade deal.

On a broader front, the US 10-year Treasury yields retreat from a two-year high while the S&P 500 Futures pare early Asian losses at the latest. Even so, the US Dollar Index (DXY) extend Friday corrective pullback from a three-week low.

That said, the DXY bounced off a multi-day low after the US Bureau of Labor Statistics (BLS) offered a positive surprise concerning January employment data. Among the key details, Nonfarm Payrolls (NFP) rose by 467K versus the median forecast for a 150K rise and 510K revised prior while the Unemployment Rate rose to 4.0% from 3.9% in December, compared to expectations for a no-change figure. It’s worth noting, however, that the U6 Underemployment Rate extended the south-run to 7.1% from 7.3% previous readouts. Also encouraging was Average Hourly Earnings that jumped strongly to 5.7% versus 4.9%.

Given the full markets and a light calendar, investors may witness a slow start to the week until Thursday’s US inflation data.

Read: US Treasury yields pare NFP-led gains at 25-month high, stock futures stay pressured

Author

Anil Panchal

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

More from Anil Panchal
Share:

Editor's Picks

AUD/USD eyes 100-SMA hurdle near 0.7035 as hawkish RBA counters firmer USD

AUD/USD regains positive traction on Tuesday and climbs to 0.7030 during the Asian session, reversing the previous day's corrective slide from a one-month high as hawkish RBA rate expectations continue to support the Aussie. Spot prices, however, remain below the 100-day SMA pivotal resistance amid a firmer US Dollar as traders brace for Australia’s September CPI report on Wednesday ahead of the Fed rate decision.

USD/JPY sticks to modest gains above 157.50 as traders await Fed, BoJ meetings

USD/JPY attracts buyers for the third straight day, recovering further from a one-month low ahead of Wednesday’s FOMC decision and the BoJ policy update on Friday. Meanwhile, expectations that the BoJ may hold off on aggressive rate hikes weigh on the Japanese Yen, and the US Dollar advances to a nearly two-week high, supporting the currency pair.

Gold holds above $4,000 as traders brace for Fed interest rate decision

Gold edges higher during American trading hours on Tuesday after trading in negative territory earlier in the day. A slight decline in Oil prices offers some relief, although a firmer USD limits the upside as traders await the Fed’s monetary policy announcement on Wednesday.

Crypto Today: Bitcoin, Ethereum and XRP on edge as sell-side pressure intensifies

Cryptocurrency prices are broadly correcting on Tuesday, led by Bitcoin (BTC) edging lower below the pivotal $80,000 level. Ethereum (ETH) mirrors Bitcoin’s neutral-to-bearish outlook, while Ripple (XRP) hovers around $1.30.

Experts agree: Fed policy outlook and geopolitical tensions keep US Dollar bid

The US Dollar Index rallies 0.6% in three days and hits fresh two-week highs above 102.00. Investors return to the US Dollar as markets brace for a hawkish hold by the Fed on Wednesday. Waning hopes of any immediate US-Iran peace deal have provided additional support to the safe-haven USD.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.