Asian equities nervously mixed

FOMC minutes stabilize equity markets

Wall Street’s leading indices finished the session modestly lower overnight. That belied the intra-day volatility, though, with stocks gyrating in huge ranges before the FOMC minutes restored a sense of order. An on-message Fed lifting spirits after a day of inflation and crypto nerves. Back to the real world, the other noteworthy development overnight came from the FOMC minutes. The minutes both steadied the intra-day ship by staying on super-easy until our goals are achieved message, while at the same time fraying nerves as talk to planning to start talking about tapering was mentioned. Part of the sell-off intra-day was likely due to the cryptocurrency cremation, with liquidated longs selling stocks to raise cash. The S&P 500 fell 0.29%, with the Nasdaq almost unchanged and the Dow Jones retreating by 0.48%.

Asian markets have looked at the price action on Wall Street overnight and wisely decided to remain on the sidelines awaiting further developments, especially with a light data calendar. The day is mixed in Asia, with the Nikkei 225 up just 0.25%. South Korea has returned from holiday with the Kospi playing catchup on its way to a loss of 0.50%. Hong Kong is much the same and has fallen 0.80%.

Mainland China’s Shanghai Composite and CSI 300 are unchanged, while Singapore has risen 0.30% while Taipei has retreated by 0.95%. Kuala Lumpur is flat, while Jakarta has risen 0.70%, powered by improving trade data just released today. Australian markets have rebounded sharply after yesterday’s torrid session, with steadying nerves pushing the ASX 200 1.25% higher and the All Ordinaries climbing 0.75%.

With US index futures unchanged in Asia, the mixed performance regionally, and the cautious ranges, suggest Europe will open higher today after catching a crypto-cold yesterday. Overall, the tail-chasing day-to-day behaviour in stock markets suggests a significant move is coming; my money is on a downward if possibly a brief correction.

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