Asian markets opened the week on a slightly upbeat note following a positive close in the US on Friday. Stocks in Sydney (+0.14%) and Tokyo (+0.05%) were flat, and the Hang Seng (+1.84%) led gains as investors swapped their US-listed Alibaba shares for the Hong Kong shares to avoid any de-listing of major Chinese tech companies as a result of escalating US-China tensions. Alibaba shares were up 3.56% in Hong Kong. It is expected that the outflow in US-listed Chinese stocks continue and drain liquidity in the US-listed stocks, as many Chinese tech firms are now going after a dual US-HK listing to reduce their risks of being kicked out of America. The outflow of Chinese-tech liquidity shouldn’t have a large impact on the overall US stock markets, remarkable though it is. On the other hand, knowing there are other options to stay invested in valuable Chinese holdings despite the trade war is certainly a relief for global investors.
US futures edged higher, and activity in FTSE (+0.38%) and Euro Stoxx (+0.52%) futures hint at a positive start in Europe on Monday.
The US dollar was flat near the 93 mark in Asia, as the 10-year treasury yield slid below 0.63%.
On the data front, retail sales in New Zealand fell 14.2% in the second quarter as the Covid lockdown took a toll on economic activity. The figure was better than expected by analysts.
The week starts with an almost empty economic calendar, but important economic events will keep the markets busy later this week.
Investors are focused on the German and US GDP data (on Tuesday and Thursday respectively), and Jackson Hole symposium on Thursday, where the Federal Reserve (Fed) Chair Jerome Powell will speak about the latest view over the US economy and the monetary policy. Released last week, the Fed minutes disappointed the doves as the US policymakers refrained from giving more policy guidance as the US economy remained in a difficult position due to persistently rising Covid cases. Powell will likely reiterate the Fed’s support to the economy without however hinting at new policy tools or measures in the foreseeable future.
