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Y137.00 Comes Under Attack

JGB TECHS

(U2) Off Lows, But Still Fragile

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Off Worst Levels In Asia, But Plenty Of Worry Still Evident

EQUITIES

Early Asia-Pac trade saw Wednesday’s risk-negative mood spill over, although the S&P 500 e-mini’s failure to make a meaningful, lasting break below the 4,000 mark allowed wider risk appetite to stabilise. Some Japanese demand for USD/JPY, coupled with an uptick in throughput at the Shanghai port and further positive developments surrounding Shanghai’s removal of COVID restrictions, further fuelled the wider recovery from lows in equity indices.

  • Although Chines equities opened lower, some pointed to Wednesday’s after market communique from Chinese Premier Li as another supportive factor, which helped limit early losses. As a reminder, Li noted that China will step up the adjustment of its macro policies, while repeating a vow of support for tech platforms and the private sector. He also insisted that China has the policy space to deal with the challenges that it currently faces.
  • The CSI 300 is down a mere 0.25% as a result, although the Hang Seng Tech Index is a more pronounced 3.4% lower on the day. The latter saw tech giant Tencent struggle after executives warned that it would take time for Beijing to act on its promises re: support for the sector, which came alongside an earnings miss for the company. Elsewhere, the Nikkei 225 and ASX 200 are over 1.50% cheaper, with Wednesday’s U.S. equity weakness leaving a firmer imprint on those indices.
  • The major U.S. e-mini contracts sit little changed to 0.2% firmer vs. settlement. Note that CISCO reported disappointing revenue after hours on Wednesday, with the company’s guidance metrics also providing notable disappointment.
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Early Asia-Pac trade saw Wednesday’s risk-negative mood spill over, although the S&P 500 e-mini’s failure to make a meaningful, lasting break below the 4,000 mark allowed wider risk appetite to stabilise. Some Japanese demand for USD/JPY, coupled with an uptick in throughput at the Shanghai port and further positive developments surrounding Shanghai’s removal of COVID restrictions, further fuelled the wider recovery from lows in equity indices.

  • Although Chines equities opened lower, some pointed to Wednesday’s after market communique from Chinese Premier Li as another supportive factor, which helped limit early losses. As a reminder, Li noted that China will step up the adjustment of its macro policies, while repeating a vow of support for tech platforms and the private sector. He also insisted that China has the policy space to deal with the challenges that it currently faces.
  • The CSI 300 is down a mere 0.25% as a result, although the Hang Seng Tech Index is a more pronounced 3.4% lower on the day. The latter saw tech giant Tencent struggle after executives warned that it would take time for Beijing to act on its promises re: support for the sector, which came alongside an earnings miss for the company. Elsewhere, the Nikkei 225 and ASX 200 are over 1.50% cheaper, with Wednesday’s U.S. equity weakness leaving a firmer imprint on those indices.
  • The major U.S. e-mini contracts sit little changed to 0.2% firmer vs. settlement. Note that CISCO reported disappointing revenue after hours on Wednesday, with the company’s guidance metrics also providing notable disappointment.