E-Minis Off Worst Levels Of The Day As Chinese & HK Equities Recover

E-minis have bounced from worst levels of the day, as the Hang Seng & CSI 300 move into positive territory. While there hasn’t been much in the way of fresh, overt headline flow to drive the move, we have also seen a rally in the yuan when it comes to FX trade. The previously outlined weekend comments from Messrs Biden & Yellen will be providing some positive input for Chinese equities, but didn’t prevent a move lower for the Chinese & HK equity indices during early Monday trade.

• Note that earlier in the session we flagged a story doing the rounds from China’s state-owned Shanghai Securities News, which suggested that China is planning to take “extraordinary” measures to combat the divergence in upstream and downstream manufacturers’ profitability. The article suggests that the move looks to fend off risks surrounding investment, citing a senior researcher with a government thinktank. This hasn’t got much in the way of a wider airing but could be providing some support when it comes to Chinese & HK equities.
• Also note that China’s Jiangsu province, which neighbours Shanghai, has largely relaxed its COVID quarantine policy for people leaving Shanghai.
• Positive musings from UBS Wealth Management re: the prospects for Chinese equities during H222 are also doing the rounds, highlighting an improvement in sentiment and attractive valuations in the energy, mining and some of the banking sector (although the bank notes that the rally that they expect may be “bumpy”).