Australian Shares

The inflation bear swatted down stocks on Wall Street overnight as the latest monthly US CPI figure spooked risk markets as it made a 12 year high, boosting bond yields alongside the USD.

Still not a pretty sight across risk markets here in Asia with Taiwanese stocks in near freefall, while other risk assets remain concerned about inflation fears across the US and Europe, with both German and US inflation monthly prints coming in tonight.

BofA with the note.

While the NASDAQ was unchanged overnight, the risk of the risk complex continued to oscillate into negative territory on inflation concerns with Treasury yields spiking yet again.

Not a pretty sight across stock markets here in Asia in response to the tech wreck on Wall Street overnight, the exception being mainland Chinese bourses and relatively speaking, the local ASX200.

For the past year or so, we have watched in amazement at what we have labeled the Amphetamine Cycle.

Tech stocks sold off significantly overnight on Wall Street, bringing the rest of the risk complex down as inflation fears reared their ugly head once more, although European stocks escaped most of the carnage.

A mixed start to the trading week here in Asia despite the full return of mainland Chinese and Japanese markets and a booming Wall Street on Friday night following the very disappointing US unemployment print which shook up a lot of expectations.

For months now we have observed as market narratives have splintered into distinctly bullish and bearish camps but stocks have gone up anyway.

A fairly staid finish to the trading week here in Asia with a truncated session for mainland Chinese and Japanese markets equating to a bit of catch up and not much else, with the former retracing significantly.

Some stock markets are at all-time highs, but beneath the bonnet, there is also a vast bust going on owing to what strategists call “factor rotations”.

Wall Street zoomed higher on sentiment yet again, with the Dow Jones putting in a record high while European markets were more modest in their rises as the Bank of England kept its composure and interest rates steady, indicating some tapering ahead.

The return of mainland Chinese and Japanese markets has resulted in a mix mood across Asia with the ASX200 hit on local COVID problem and macro Chinese problems while a somewhat bullish catchup was played out elsewhere.

Better economic data from the US coupled with better earnings saw yet another reversal in sentiment on Wall Street overnight but it was shortlived as tech stocks moved lower yet again.

Asian stock markets are still relatively quiet and despite the drubbing on tech stocks overnight on Wall Street and the still closed mainland Chinese and Japanese markets, the ASX200 was able to put in a very solid session.

It began in mid-February this year as markets woke with a start to an imminent burst of US inflation.

Tech stocks were crunched on Wall Street overnight despite the lack of catalysts, although Treasury Secretary, former Fed boss did spook some by suggesting the Fed needs to raise rates soon.

With mainland Chinese and Japanese markets closed again, there wasn’t much going on here in Asia even as the RBA board of doves met again and did precisely nothing, leaving the Aussie dollar essentially unchanged.

A dovish mood from Fed officials overnight sent the USD into reversal mode and helped buoy Wall Street after a disappointing ISM manufacturing print, giving Asian stocks a catalyst to rebound from the poor start to the trading week yesterday.

Not a lot of action across risk markets here in Asia with mainland Chinese and Japanese markets closed for at least the first half of the week.

Wall Street took another hit on Friday night, unable to translate record highs into yet more record highs as inflationary pressures continue to mount in the US economy.

A sea of red across stock markets here in Asia in response to a much lower than expected Chinese manufacturing PMI, coupled with some large trading holidays for Japanese and Chinese markets has left a lot of risk off the table.