Lower In Asia As ECB Policy Meeting Eyed; Australian Financials Hit 14-Month Low

Major Asia-Pac equity indices are lower at typing, tracking a negative lead from Wall St., ahead of the ECB’s meeting later on Thursday as well.

• To recap, the ECB is expected to end APP in early July while signalling the commencement of rate hikes, with debate re: the possibility of 50bp rate hikes increasingly coming to the fore. A reminder that this comes as Eurozone inflation last came in at a larger-than-expected, record high in May (+8.1% vs BBG median +7.8%), rising for a seventh consecutive month as well.
• China-linked, high-beta equities underperformed their broader domestic equity benchmarks amidst worry re: previously flagged, partial COVID lockdowns in Shanghai, with the Hang Seng Tech Index being 0.8% worse off, while the ChiNext Index and STAR50 deal 2.2% and 2.4% weaker respectively at typing.
• The Hang Seng Index and CSI300 trade 0.2% and 0.6% lower at typing respectively by comparison, with their respective real estate sub-indices outperforming (Hang Seng Properties: +1.1%; CSI300 Real Estate Index: +2.3%). Energy and materials names caught a bid on a rise in major crude benchmarks as well, with pessimism evident in richly-valued sectors such as the CSI300’s Consumer Staples and Healthcare sub-indices.
• The Australian ASX200 lagged peers, trading 0.9% lower at writing, with tepid performance in the major miners (0.2% firmer to 1.0% weaker) mixing with continued struggles in Australian financials. The ‘Big 4’ Australian banks sit 1.5% to 3.3% softer apiece, with the broader sub-index on track for a fourth consecutive day of losses (-7.3% for the week so far), although the gauge has notably rebounded from 14-month lows made earlier in the session.
• U.S. e-mini equity index futures sit 0.1% to 0.2% worse off at typing, a little above session lows after earlier pessimism surrounding Shanghai’s announced lockdown sent the various contracts to/around Wednesday’s worst levels.