Better Bid In Asia As Chinese 5-Year LPR Lowered

A larger than expected cut in the latest Chinese LPR fixing, aimed at boosting support for the property sector, facilitated a bid in the major Asia-Pac regional indices ahead of the weekend, even with mixed headlines coming out of Shanghai re: COVID (reopening plans for the financial district of Pudong were outlined vs. 3 COVID cases being detected outside of the city’s quarantine facilities). Elsewhere, risk assets may have benefitted from White House suggestions that Presidents Biden & Xi could speak again, within weeks.

• This leaves the major regional equities up 1-2% at typing, with the ASX 200 slightly lagging vs. its regional counterparts. Some pointed to election risk as a headwind for the ASX, with Australia set to head to the voting booths on saturday. On this front, we would suggest that a hung parliament outcome (which may require some form of Labor-Green power sharing agreement) would provide much more uncertainty than a win for the opposition Labor Party (which the opinions polls currently lean towards).
• E-minis are 0.7-1.1% better off, with the NASDAQ 100 leading.