Risk appetite soared last Friday, and spilled over to the Asian session on Monday after strong US jobs data, despite growing possibilities of tapering by the Federal Reserve. The euro rose to near a six-week high against the dollar. The Dow and S&P 500 closed more than 1 percent higher and the Japanese Nikkei Index surged almost 2.3 percent.
US equity markets are still nervous in anticipation of a probable tapering by the Federal Reserve showing how stimulus sensitive the markets are. The way the market reacted to the ADP numbers which came much better than expected is the perfect illustration of it. Asian shares plunged lower with the Nikkei dropping 1.50 percent as bond yields rose globally amid growing tapering speculation.
US equities trade lower for the third day in a row as investors prefer to stay on the side-lines ahead of major data due later this week, and as Fed tapering talk resurfaces. Asian equities followed the same path, again pressured by the potential outcome of Fed tapering; traders booked their profits following the recent rallies, and in so doing sent the Nikkei more than 2% lower from opening level.
US equities slipped lower, seemingly in cautious mode ahead of high impact data later this week. Asia was mostly negative as well although in Japan the Nikkei index made it to positive territory helped by comments from BoJ’s Kuroda that made it clear that the BoJ was ready to shoot out more stimulus if needed.
China maintains the strength of its manufacturing sector with PMI readings out on Sunday published at 51.4 in line with previous readings, but which surprised consensus estimates of 51.1 positively. Government figures were endorsed when the private HSBC Manufacturing PMI, earlier today, showed similar better than expected results as well.