- Trump administration re-activates anti-China moves by targeting companies listed on American indices.
- ECB announced more than anticipated addition to PEPP, revised down growth/inflation forecasts.
- WTI, US stock futures stay depressed amid a light calendar in Asia.
- US-China headlines, US employment data will be the key for immediate direction.
Despite fresh headlines suggesting the return of the US-China rivalry, Asia equities trade mixed as markets await monthly employment data from America amid a light calendar ahead of the European open on Friday.
In addition to US President Donald Trump’s grim tone over China’s failure to keep words on Hong Kong and trade deal, the Trump administration’s push for increasing the bars for Beijing based companies on the US exchanges renews the tussle between the global economic giants.
Also challenging the market’s risk-tone could be the fears of the coronavirus (COVID-19) second wave and a sudden increase in bets supporting the presidency of Joe Biden versus Donald Trump, as per RealClearPolitics average of polls.
Elsewhere, the European Central Bank (ECB) added 600 billion Euros to its Pandemic Emergency Purchase Programme (PEPP) while saying that GDP growth will contract 8.7% this year, and not recover to pre-crisis levels until 2023. Inflation is seen as staying weak.
Furthermore, Australian PM Scott Morrison kept the investment rules tighter whereas New Zealand’s Finance Minister Grant Robertson signaled further support to the business in combating COVID-19).
Against this backdrop, MSCI’s index of Asia-Pacific shares outside Japan rises near 0.25% whereas Japan’s Nikkei register 0.42% gains to 22,793 by the press time. Even so, stocks in China, New Zealand and Indonesian market mild losses versus small profits cited by shares listed on exchanges of India, Australia and South Korea. Additionally, the US 10-year treasury yields slip from the previous day’s run-up to 0.83% while US stock futures also pause the earlier advances.
Looking forward, US Nonfarm Payrolls (NFP) for May, expected to recover to -8000K from -205000K prior, will be the key number to watch for immediate market direction. Other than that, US Unemployment Rate, forecast 19.8% versus 14.7% previous, will also be the key to watch in the May month US jobs report.
Read: US Non-Farm Payrolls May Preview: Context is everything
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