Mixed In Asia

Chinese & Hong Kong equities lost ground on Tuesday, which dragged the likes of the Nikkei 225 and the ASX 200 back from best levels of the day. E-minis also moved away from best levels. Note that Chinese media flagged the details of guidance when it came to greater oversight re: the ride hailing space, which may have weighed on the Chinese tech space and related names. There was also an argument for good news being bad news re: the Chinese markets, with firmer than expected official PMI data perhaps lessening the need for imminent policy easing. Note that the PBoC continued its recent run of net liquidity injections via OMOs on Tuesday.

• This came after Fed Chair Powell sounded a little more cautious in his pre-released, initial comments ahead of his Tuesday testimony. A reminder that Monday saw the NASDAQ 100 reverse all of Friday’s Omicron-inspired losses, while the S&P 500 & DJIA ate away at their own respective Friday losses, aided by the retracement from cheaps in the U.S. Tsy space, alongside less worry re: the mortality rate of the new COVID strain.
• All in all, participants continue to weigh up the balance of the economic impact of the Omicron COVID strain vs. the potential elongation of ultra-loose policy settings owing to the same economic impact.