US yield decline boosts Asian, Australian equities
The expansion of the Huawei ban by the US government had only a passing effect on US markets overnight, which have bigger fish to fry. That cannot be said about Asia though, whose regional fortunes are much more closely entwined with China. Asia’s markets were mostly slightly lower, with Australian ones also weighed down by China’s wine anti-dumping probe.
Both the Nasdaq and S&P 500 flirted with record highs overnight. The S&P 500 finished 0.27% higher, the Nasdaq climbed 1.0%, while the Dow Jones eased 0.30% with big-tech, once again, trampling all before it. The S&P 500 and Nasdaq appear poised now to break resistance at 3400.00 and 11200.00 respectively, boosted by the move lower in US yields. Both the S&P 500 and Nasdaq futures have continued climbing in Asia this morning, and that has reversed the early sell-off in Asia stock markets.
Trade fears see the Nikkei 225 edging lower by 0.30%, with mainland China’s Shanghai Composite recovering an early sell-off to be 0.50% up for the session. The CSI 300 has eased 0.30%, reflecting its tech-heavy composition, while the Hang Seng has edged 0.25% higher.
Singapore has climbed 0.25%, with both Kuala Lumpur and Jakarta 0.50% higher. The early move down in Australia on China tensions has reversed as US index futures continued their overnight rally in Asia. The ASX 200 has climbed 0.75%, and the All Ordinaries is 0.30% higher.
With the buy everything trade’s momentum increasing across asset classes, and with US yields poised for further moves lower, equity markets should remain well supported. The recovery by Asian markets being a prime example. European equities should experience the same sugar rush as long as US equity futures remain solidly in the green for the remainder of the Asia session.