Broad Losses, Hong Kong & Some China Related Markets Underperform

Regional equities are lower in Friday Asia Pac trade. Weakness has been broad based, although for the most part, losses have been under 1%. Hong Kong and some China related markets are the exception. US futures were lower, particularly in the tech space, in early trade, but have largely recouped losses. Eminis are marginally higher, last near 4366, while Nasdaq futures are down a touch (but were off -0.30% at one stage).

• Carry over from the US yield rebound in Thursday trade, led by Powell comments and a poor 30yr debt auction, has weighed on Asia Pac sentiment so far today. The fact that nominal US yields have drifted a little lower today has probably helped contain the fallout for broader risk appetite, including in the equity space.
• In HK, the HSI is off 1.6% at the break, slightly above session lows. Some disappointing earnings results, led by China chipmaker SMIC has weighed, while comments from PBOC advisor Wang Yiming were also noteworthy. He stated that China can still achieve its growth target this year, but noted that domestic demand remains under pressure given a weak consumption recovery.
• Elsewhere, PBoC Governor Pan reiterated that the central government is paying close attention to local government debt risks in some provinces, while broader property risks remain manageable.
• The CSI 300 sits 0.70% down at the break, but also away from session lows. Northbound stock connect outflows have been evident in the first part of the session (-4.7bn yuan).
• Japan stocks are outperforming modestly, the Topix off 0.10%, up from session lows, with weakness in Softbank weighing in early trade.
• The Kospi and Taiex are both off by less than 1% at this stage. It's a similar story in SEA markets.