With US markets closed on Monday for Labour Day, the gentle move higher by US stock index futures and a lack of negative headlines, Asian markets have followed suit this morning cautiously.
The Nikkei 225 has risen 0.80%, with the KOSPI rising 0.74%. In China, the Shanghai Composite increased by 0.75%, while CSI 300 decreased by 1.68%, with the Hang Seng moving 0.14% higher. The tone is more mixed across regional Asia. In the ever-optimistic Australia, no news has been good news. The ASX 200 and All Ordinaries rising 0.80% this morning.
The session is likely to be a directionless one and at the mercy of short-term moves in US index futures, as the street awaits the return of Wall Street this afternoon.
The rest of the day’s data releases are unlikely to make much noise on the markets, with the US data exceptionally quiet. The events are all tier-2, with the only one of note being JOLTS Job Openings. In Germany, the Balance of Trade will receive more scrutiny than usual from investors after Industrial Production faltered yesterday. The European Union estimated GDP for Q3 is expected to decline by 12.10%. Arguably, the German data is more critical. With so much optimism positioned for an EU recovery, a faltering of the Eurozone’s locomotive could add more corrective downward pressure on the euro.
With a data vacuum in relative terms, markets will be vulnerable to headline-induced short-term swings. That includes Europe where Brexit, having been thankfully forgotten for so long, is now back on center stage. Realistically, we await the return of Wall Street to see if the holiday mood leaves investors in a positive frame of mind; or if the FOMO-gnomes have spent the long-weekend looking up the definition of “put” in their day-trading manuals.
Asian Equities Move Cautiously Higher
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