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HK/China Equity Losses Weighs On Broader Risk Appetite


Weakness in HK/China stocks is weighing on broader risk appetite. The HSI China enterprise index is off by over 5%, the tech sub index more than 6%. This is spilling over to US futures, which are still positive (Eminis last around +0.30%) but comfortably down from best levels. Regional equities are still in positive territory, but also off from earlier session highs.

  • Sentiment is being weighed down by an expectation of current China policies continuing, around dynamic covid-zero etc, in the aftermath of the Party Congress.
  • Outside of equities, higher beta FX is lower, with AUD/USD the weakest point, off 0.50% to below 0.6350. USD/JPY has rebounded from earlier lows, last back close to 149.00. We remain sub earlier session highs, which came in just above 149.70.
  • EUR/USD is back to 0.9835/40, -0.25%, with generally a firmer USD evident against the majors and in USD/Asia pairs.
  • GBP/USD is the exception, with the pair holding above 1.1320 for now (+0.20%).
  • US yields are slightly lower, US 2yr off 2bps to 4.45%, the 10yr -4bps to 4.18%.

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