Soft PMIs sends Asian equities lower
Weakening Manufacturing PMI data from across the Asia-Pacific, combined with a low close on Wall Street, sees most of Asia trading in the red today, ignoring the bounce in US index futures this morning. Overnight, a rise in US yields saw the S&P 500 finish 0.63% lower, the Nasdaq lost 0.41%, with the Dow Jones easing by 0.57%. In Asia, US futures have rebounded on thin volumes, S&P 500 and Nasdaq futures rising by 0.30%, while Dow Jones futures have unwound overnight losses, rising 0.60% and suggesting month-end flows played their part in the overnight retracement.
With most of Asia in the red, one exception is Japan where the Nikkei 225 has risen by 0.65% today. The rise in US yields overnight inspired a bout of yen weakness, which notionally, will improve exporter performance. In a similar vein, the Kospi is also 0.60% higher, although the Shanghai reopening may be playing a greater part in that rally.
In China, the contractionary Caixin Manufacturing PMI has drowned out any Shanghai reopening peace dividend, the Shanghai Composite and CSI 300 are both down 0.10%, while Hong Kong is 0.20% lower. Regional markets are also lower, although Singapore has managed to rise by 0.50% today. Elsewhere, Taipei is down by 0.55%, Kuala Lumpur is down 0.80%, Bangkok is 0.20% lower, and Manila has fallen by 0.60%. Jakarta is closed for a holiday. In Australia, the All Ordinaries has eased 0.10%, while the ASX 200 has risen by 0.10%.
A nondescript Asian session will not provide much lead for European markets, which headed lower overnight on stagflationary data and as Russia cut off natural gas supplies to Denmark, the Netherlands, and a small importer in Germany over rouble payments. Today, however, Europe should get a boost from the OPEC Russia production quota exemption story.
US markets, as ever, remain a turkey shoot. Today they might be nervous about US inflation and Fed tightening, or they may not.
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