New York rally lifts Asian equities

Markets higher after US inflation report

Wall Street ignored weak JP Morgan Q1 results and instead continued to focus on the peak US inflation theme overnight, sending US equities sharply higher. The S&P 500 rose 1.12%, the Nasdaq leapt 2.03% higher, and the Dow Jones climbed by 1.05%. In Asia, futures on all three indexes have booked solid gains. S&P 500 and Dow futures rising by 0.20%, while Nasdaq futures have risen by 0.45%.

That has led to a broad rally in Asia ahead of the Easter holidays, led by the North Asia heavyweights. Japan’s Nikkei 225 is 1.15% higher, but South Korea’s Kospi has only gained 0.10% after the Bank of Korea unexpectedly lifted interest rates. China markets are also having a good day after spending this week mysteriously rallying in the afternoon, which I put down to buying from China’s “national team.” Markets there are expecting an imminent RRR cut which is overshadowing the omicron challenges for now. The Shanghai Composite has risen by 0.70%, the CSI 300 by 0.75%, and the Hang Seng by 0.45%.

In regional markets, Singapore has climbed by just 0.15% after the MAS tightened monetary policy, while Taipei is down 0.10% as Taiwan companies face production challenges in mainland China due to virus restrictions. Kuala Lumpur is 0.25% higher, Jakarta is down 0.20% while it is a market holiday in Bangkok and Manila. Australian markets are also higher today, helped by the strong Wall Street session and higher oil prices. Activity is slightly muted as it enters a four-day break. The ASX 200 and All Ordinaries have climbed by 0.70%.

European markets face a challenging session with plenty of two-way risk around the ECB policy meeting. Parts of Europe are already on holiday today, and with the Easter break ahead, activity is likely to fall after the ECB results are out. European traders, facing a multi-day break with plenty of event risk, are unlikely to load up on risk.

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