Asian equities mostly flat
Asian equity markets opened in a sedated fashion today, mostly trading around each side of unchanged as volumes were muted by the China and Japan holidays. The somewhat confusing price action overnight in New York has left the region content to sit in wait-and-see mode with COVID-19 nerves regionally, offsetting the bullishness of the Wall Street reopening gnomes.
Overnight, the S&P 500 rose 0.28%, while the NASDAQ retreated by 0.48%, even as the Dow Jones climbed 0.71%. Equity markets ignored the US Manufacturing ISM data for April, which came in at 60.50, still expansionary but well below market forecasts of 65.0.
The equity markets are instead concentrating on announcements around New York of the impending easing of pandemic restrictions, with the reopening/recovery narrative in the ascendant.
In Asia, futures on all three have fallen, giving back much of the overnight gains and suggesting that despite the noise, equity markets are as directionless as other asset classes over the past two sessions.
At the time of writing, the South Korean KOSPI was down 0.35% after the higher inflation print this morning. Hong Kong was unchanged, while Singapore fell 0.30% as locally transmitted COVID-19 fears persist. Kuala Lumpur climbed 0.10% after oil prices rose last night, and Jakarta increased by 0.35%.
The Reserve Bank of Australia held rates at 0.10%, as expected. The central bank raised its economic forecasts, saying it projected unemployment to drop to 5.0% at the end of 2021, down from the current level of 5.6%.
At the same time, the RBA said it would consider extending its USD200 billion QE program into 2022 and did not anticipate raising rates before 2024. RBA Governor Philip Lowe acknowledged that the economic recovery has been faster than expected. Still, the bank signaled that it remains committed to a dovish stance. Australian markets were up slightly, with the ASX 200 rising 0.56% and the All Ordinaries climbing 0.50%.