Global Markets: Asia’s COVID-19 Control Tempers Global Stock Sale, US Future Jump


SINGAPORE (Reuters) – Asia’s stock markets plunged on Thursday, but without panic selling in Europe and the United States, while US futures sprung as investors tried to hold on to fears that a fresh lockdown COVID Can derail a recovery from -19. Ubiquitous epidemic.

FILE PHOTO: A man works on the Tokyo Stock Exchange after the market opens on October 2, 2020 in Tokyo, Japan. REUTERS / Kim Kyung-Hoon

MSCI’s largest index of Asia-Pacific shares outside Japan fell 0.6%, with a steep decline in Australia, down 1.6%, and 1% in South Korea.

Japan’s Nikkei fell only 0.3%, Chinese blue chips rose 0.5% and the yuan led a soft surge in Asian currencies against the greenback.

On Wednesday, she cried the biggest fall in Wall Street and Europe in months, highlighting Asia’s emergence from an epidemic that still haunts the rest of the world.

Traders lifted S&P 500 futures with mood up 1%, and on the expectation that intensifying volatility could mean a sharp rebound. European futures rose by half a percent and FTSE futures by 0.3%.

“Asia is not really biased in the story of this second or third wave because it is largely under its control,” said Rob Cornell, Asia’s chief economist at Dutch bank ING.

“As a result, domestic economies look justified.”

For example, Taiwan, which is Asia’s best-performing currency, marked its 200th straight day on Thursday without a local broadcast, while France and Germany followed for a lockdown and a virus sweep in the US Midwest. Formulated as

Oil also rose on Thursday, with Brent futures rising 0.2% to $ 39.20 a barrel, down 5% on Wednesday. [O/R][AUD/]

Nevertheless, for the week so far the commodity, often regarded as a proxy for global energy demand and growth, is down 6.2% and world stocks are down by 4.7%, as the epidemic worsens and a U.S. Election looms.

“As long as the market was traveling with hope, improving health care services in dealing with the epidemic would prevent the introduction of serious lockdowns,” National Australia Bank FX strategist Rodrigo Catril said in a note.

“At least in Europe, this dynamic has now changed … Now the question is whether America will follow the states.”

Fundamentals

Economic data and a European Central Bank meeting later Thursday are the main focus, gathering uncertainty about Tuesday’s US election, as well as keeping investors on edge.

The Bank of Japan made no changes to monetary policy settings, as expected, although trimmed its growth forecasts to reflect sluggish service spending during the summer.

Investors expect the European Central Bank to similarly hold off on new measures, but to signal action in December, which is likely to keep a lid on the euro.

A 10-day low in normal currency against the dollar and a hundred-day low was recorded on the yen on Wednesday before recovering slightly. It last bought $ 1.1752.

German unemployment and inflation figures, the European confidence survey and advance US GDP figures will also be closely watched – with US data likely to show record growth, but still leave the economy behind where it began in 2020 Was.

“Any disappointment in these numbers could have an impact on the market given the current weakness,” said Michael McCarthy, Sydney-based strategist at CMC Markets.

Investors are increasingly wary of the contested US election result that could spark a wave of risk-asset sales.

Wall Street’s “fear gauge,” the cab volatility index, reached its highest level since June on Wednesday and implied currency volatility indicates a wild ride is expected.

However, the US bond market was very sluggish, as investors showed up on the last polling day and felt that taking a huge government debt for coronovirus relief expenses did not matter who would win.

Benchmark US 10-year yields rose overnight and added nearly half a basis point to 0.7877% on Thursday.

Reporting by Tom Westbrook in Singapore. Additional reporting by Pete Schroeder in Washington; Editing by Lincoln Feast.

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