Asian equities started today’s session with a positive tone with major indices trading in the green, however sentiment in the Hang Seng has been slightly dampened after the release of today’s primary focus; Chinese HSBC Manufacturing PMI, which missed expectations at 50.4 vs. Exp. 52.2 (Prev. 52.3). We heard comments from the chief China economist at HSBC, who noted that the underlying strengthen of the Chinese growth recovery remains intact, as indicated by still expanding employment and the recent pick-up of credit growth. As a proxy of China’s economy, AUD/USD suffered a 26 pip spike-lower and continues to trade around the session lows following the release.
Over in Japan, asset classes are soaring amid hopes for further easing after Kyodo reported over the weekend that the head of the Asian Development Bank, Haruhiko Kuroda, is leading the race to become the new Bank of Japan’s governor with sources saying PM Abe is preparing to nominate him for the role. Consequently, the Nikkei 225 has been the standout performer on the back of substantial JPY weakness, with USD/JPY hitting 94.77 in early trade, the highest level since May 5, 2010. The biggest near-term market risk for USD/JPY is the official announcement of the BoJ governor nomination likely to be during the week. Elsewhere in the FX space, GBP/USD continues to trade heavy after Moody’s cut the UK’s government bond rating to Aa1 from Aaa last Friday.
Looking ahead, the calendar for the rest of the session remains on the light side although Singapore CPI is scheduled to be released on 0500GMT/2300CST. As a reminder, the outcome of the Italian election is likely to be a cause of uncertainty.
As of 0226GMT:
ASX200 (+0.70%), Nikkei 225 (+1.94%), Shanghai Comp. (+0.31%), Hang Seng (+0.08%), KOSPI (-0.02 %)
24 Feb 2013 - 21:30 - - Source: RANsquawk
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