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Hong Kong Equities Firm, Leading To Small Risk On Elsewhere

CROSS ASSET

Hong Kong equities have turned higher after an indifferent start. The HSI last +1%, slightly down from session highs. This has helped drag China stocks back into the green, after a weaker start. The HSI properties sub index is one of the stronger performers, up over 2.5% at this stage, but also away from highs. the market may be speculating around fresh stimulus measures. Earlier in the day onshore media stated new loans should rebound in May, whilst also stating RRR and interest rate cuts were possible for H2. This is likely aiding sentiment at the margins.

  • We have seen some spill over effects from the better equity tone, with the greenback has marginally pressured in recent dealing.
  • The Kiwi is ~0.2% firmer, bulls look to target the high from June 2 at $0.6111, AUD/NZD is a touch off session lows and is holding below the $1.09 handle last printing at $1.0880/90.
  • Elsewhere in G-10 EUR and GBP are both ~0.1% firmer. SEK is ~0.3% firmer, and the strongest performer in the G-10 space at the margins however liquidity is generally poor in Asia. USD/CNH is back from earlier highs, but has seen some support sub 7.1100, while 1 month USD/KRW is back to 1296, although onshore markets are closed today.
  • US Treasury Yields are a touch higher and E-minis are ~0.05% firmer however they were down as much as 0.2%.

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