Equity markets in Asia are enjoying some decent gains overnight, with China and Hong Kong the obvious outperformers, while Europe is also enjoying a positive start on Wednesday.
Choppy trading conditions are still evident this week, although the latest Chinese PMIs have provided some cause for more optimism. It was already believed that the transition from zero-Covid to living with it was going smoothly, but this survey data suggests businesses are now extremely optimistic about the future.
That bodes well for China and regionally as well, as strong demand boosts trade and a resurgence in tourism restores the battered industry. There’s still a long way to go, and there could be setbacks along the way, but investors will no doubt be encouraged by these early signs.
Those with close economic links with China have seen their currencies perform well after the releases, while the USD/CNY is also trading much stronger on the day. While the initial reopening data may be noisy, a strong rebound will be welcome after a very challenging 2022.
A timely boost
Not one to miss out on a bump in risk appetite, bitcoin is trading more than 2% higher this morning. It appears to have consolidated around late-February lows in recent days after failing to break key resistance – $24,500-$25,500 – in the middle of the month.
That could be a sign of weakness, at least in the short-term, although ultimately, it’s hard to imagine that occurring if risk appetite continues to improve.