- Equities in Asia-Pacific trade mixed amid full markets for the first in a week.
- China ends economic dialogue with Australia, Japan pressured to extend emergency.
- Biden, Fed and vaccine hopes battle pessimism, India marks record infections.
Following an upbeat welcome to traders from Tokyo and Beijing, Asian stocks dwindle as China shakes the boat during early Thursday. As a result, MSCI’s index of Asia-Pacific shares outside Japan drops 0.10% while Japan turns out as the region’s biggest gainer with a 1.77% upside by the press time.
While responding to the global ire over the trade and political behavior, the dragon nation ends “strategic economic dialogue” with Australia. It’s worth mentioning that the US-China phase one trade deal will soon be discussed and it isn’t likely to have a smooth start.
The Japanese government is under immense pressure to extend the third emergency beyond May 11 deadline while there are rumors that New Zealand will alter the travel bubble with Australia starting from today.
The economic calendar doesn’t carry any key data/events for Asia but those scheduled, also published, for Japan, Australia and New Zealand managed to stay positive.
Above all, chatters over reflation are stepping back as many Federal Reserve (Fed) officials unite to reject the rate hike fears. Also on the risk-positive side could be US President Joe Biden’s support for vaccine patent waiver and push for more stimulus.
Amid these plays, stocks in the Pacific region follow the suit of China and drop over 0.50%. However, markets in Hong Kong, South Korea and India manage to keep mild gains despite the latest weakness.
It’s worth mentioning that S&P 500 Futures also struggles to regain the early-Asian profits while the US dollar index (DXY) and Treasury yields await fresh clues after the previous day’s mixed moves amid risk-on mood.
Looking forward, Retail Sales from Eurozone can offer intermediate moves to the market ahead of the key Bank of England (BOE) meeting and local elections in the UK. It should, however, be noted that Friday’s US NFP will be crucial for the markets amid the latest soft US data.
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