Asian equities modestly positive despite weaker China trade data
On Friday, blockbuster put the economic recovery back on track with investors and saw the and finish higher while the pandemic-darling eased slightly. The S&P 500 rose 0.17%, with the NASDAQ falling by 0.40%, while the Dow Jones climbed by 0.41%. To put it in context, though, all three major indices remain at or near record highs.
US index futures eased in Asia, with NASDAQ futures notably down by 0.35%. That hadn’t dampened spirits in Asia, where a Japan and Singapore holiday thinned out the trading volume. Investors were focusing on China, where the weakness in the weekend trade data saw commodity prices, notably iron ore, fall today. It also raised expectations that China will look to ease monetary conditions or enact more stimulus as the raised fears that domestic demand was falling.
That sees China’s rising 0.85%, with the climbing by 0.80% and the jumping by 1.15%. The rally in China lifted regional equities slightly, offsetting the taper nerves from the US and Asia’s ongoing pandemic woes. The was just 0.10% higher, while followed the NASDAQ south, falling by 0.50%.
However, was 0.45% higher, with jumping 0.80% and rising 0.65%, with 0.20% higher. Australian markets were also cautious with lockdowns extending to regional New South Wales today. The and were just 0.10% higher.
China regulatory risk has not gone away and is likely to limit the cautious gains today, which will also cap gains in regional markets. Pandemic nervousness will also temper spirits, particularly in China, where a rapid spread of the Delta variant would be a game-changer for the region’s recovery outlook. Today’s fall in iron ore and other base metal prices may also only be temporary.
European markets will likely open unchanged to slightly lower, with falling China Imports rattling some nerves in Germany in particular. That will be, to some extent, offset by the fall in the on Friday, making Eurozone export pricing more attractive. With a thin calendar in Europe and the US, markets will likely spend the session chasing their tails on news headlines.