China Data Lifts Asian Equities

With US markets closed overnight, China’s trade balance data was always going to be Asia’s key inflexion point today. US futures had drifted lower, as had much of early Asia-Pacific, but the trade balance outperformance has reversed that sentiment in Asia. 

Japan once again bucked the trend, the Nikkei rising strongly once again, ignoring weak household spending data. The Nikkei 225 has rallied 0.75% higher. Japanese markets are laser-focused on a new Prime Minister who will be affected to open up the fiscal spigot ahead of an election later this year. Meanwhile, the Kospi has retreated by 0.55% with heavy selling in tech heavyweights on concerns South Korean growth is peaking.

The China trade data has lifted the Shanghai Composite 0.75% higher, with the CSI 300 rising a more sedate 0.15%. Hong Kong has also liked what it saw, the Hang Seng rising 0.50%. Singapore has reversed some early losses to be just 0.15% lower, while Taipei has fallen by 0.30%, with Kuala Lumpur up 0.10% and Jakarta flat. Bangkok has jumped 0.50% after the government expanded tourism reopening plans, with Manilla also 0.60% higher.

Australian markets appear to be reacting to iron ore futures tumbling 7.50% overnight. Although they have risen today, the ASX 200 is still down 0.25%, while the All Ordinaries remains 0.20% lower.

Overall, the China data has mitigated Asia’s heavy mood at the start of the day and should be enough to send European equities higher at the open. After that, all eyes will be on the return of US markets.

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