Hong Kong Equities Rally, USD Trims Some Of Monday's Gains

Asia Pac equities are mostly tracking higher for those markets returning from yesterday's holiday. Hong Kong is leading the way at this stage, with the tech sub index up more than 2%. The main headline index up over 1%. Anecdotes around strong China Labor day holiday period spend/activity is likely aiding gains. China markets remain closed until Thursday.

• Other markets are also firmer, although gains are closer to the 1% mark. For Japan and Australian shares, we are trading down slightly, tracking the slightly negative tone from US equity futures.
• Headline flow has been dominated by debt ceiling concerns and the proposed meeting next week between US Congressional leaders and President Biden aimed at avoiding a default. US Treasury Secretary Yellen warned the department could run out of cash as soon as June.
• US yields are lower, -0.6-2.1bps weaker across the curve. This, coupled with some strength in Asia PAC equities, is weighing on the USD. The BBDXY down 0.10%, sub 1230, with NZD slightly outperforming, up 0.20% to 0.6180.
• Coming up the main focus will be the RBA outcome. AUD/USD is last around 0.6630/35.