Asian equities drift lower

Despite some intra-day volatility, Wall Street finished the day mixed and almost unchanged. The S&P 500 lost 0.11%, while the Nasdaq rose by 0.13% and the Dow Jones fell by 0.21%. Despite the futures on all three indexes adding around 0.30% in Asia as progress was made on the US infrastructure package, Asia has, for the most part, drifted lower in sympathy with the overnight session.

Asian markets remain equally calm today after New York’s drifting. A US bi-partisan group appears to have reached a preliminary agreement on the US infrastructure package and will be presented to the US President today. Its scope and how it will be paid for will interest financial markets the most, although it has caused no ripples in Asia. The infrastructure programme progress seems to have halted the negativity if not wholly turned sentiment across the region. By and large, Asian markets that are more “tech-heavy,” are following the Nasdaq once again. Meanwhile, the more growth-orientated ones are mirroring the S&P 500 and Dow Jones.

The Nikkei 225 is unchanged, with the Kospi following the Nasdaq 0.40% higher. Mainland China’s Shanghai Composite and CSI 300 have drifted 0.15% lower, while Hong Kong is 0.10% higher. Singapore has reversed course and added 0.25%, with Taipei rising 0.20%. But Kuala Lumpur and Jakarta have fallen by 0.40%, Bangkok is down 0.60%, and Manila is down 0.15%. Australian markets are equally quiet, both the ASX 200 and All Ordinaries reversing slight early losses to be unchanged for the session.

That points to an equally nondescript opening for European equities this afternoon. It remains a day trader’s market this week, and intra-day swings will continue to shift on Fed speaker headlines. It would take a big miss lower by durable goods and PCE tonight to shift the dove needle materially – we will remain at the mercy of Fed-speak and a schizophrenic intra-day market.

Next week should see the return of more directional moves.