US markets mixed, sets the tone for Asia

Asian equity markets have generally tracked lower today with US index futures continuing lower in Asian hours, and the Nasdaq 100 futures notably, giving up some of yesterday’s gains. Overnight the Nasdaq outperformed, boosted by Microsoft’s results and tech sector M&A. The Nasdaq rose 0.76%, but the S&P 500 fell 0.17%, and the Dow Jones fell 0.80% as some legacy industries reported soft results.

In Asia, the Nikkei 225 has fallen 0.50% as the yen continues to strengthen. In China, the Shanghai Composite has risen 0.15%, with the CSI 300 up 0.55%. Hong Kong has eased 0.40%, with Taiwan down 0.35%. Singapore has fallen 0.45% and Malaysia has declined by 0.45%.

In Asia today, South Korea Consumer Confidence jumped to 91.6 from 79.4 in October. That follows an impressive Advance GDP yesterday and further reinforces that northern Asia ex-Japan is recovering strongly on the coattails of China.

Australian markets are also in the green today. The ASX 200 is up 0.15% and the All Ordinaries up 0.40% after robust CPI data this morning and M&A speculation. Australia lifted itself out of deflation with the QoQ Q3 Inflation Rate reversing the previous quarters 1.90% fall, climbing 1.60% today. The RBA however, remained uber dovish, stating that they could ramp up bond-buying indefinitely. That may be the RBA’s preferred route ahead instead of another rate cut next week. If the RBA does press the rate trigger for the first time since March, it is widely expected to trim rates from 0.25% to 0.10%. A rate cut will also raise speculation with regard to negative rates, which senior RBA officials have stated is a possibility that the bank is considering.

All in all, it is a non-descript day for Asia, having received a mixed lead from Wall Street overnight. However, with storm clouds gathering in Europe, and the impending US election, I believe that today’s session is merely a holding pattern, and that risk reduction is the path of least resistance for the remainder of this week, and into next week.