U.S. Fiscal Hope & Chinese Tech Uptick Counter Early Pressure

Worry re: the prospect of speedier rate hikes and/or swifter balance sheet reduction at the Federal Reserve made for a cautious start to Asia-Pac trade on Monday, with a market holiday in Japan thinning out broader liquidity. Reports out of Cyprus pointing to a combination of the Delta & Omicron COVID strains had little lasting impact on broader risk appetite, with the scientist that flagged the developments having to downplay speculation that the combination came about on the back of contamination in the testing lab.

• The COVID situation in China provided another source of concern in early trade, although growing speculation surrounding the potential for fresh U.S. fiscal stimulus helped counter that.
• Volatile trade continued when it came to the Chinese property developer sphere, with troubles for some individual names mixed in with signs that Guangdong is looking to promote activity that would strengthen the sector (via M&A, supported by SOEs).
• Elsewhere, the Hang Seng Tech index is on course to register its third consecutive day of gains after tagging a fresh all-time low last week (some dipping their toe into the beaten down space).
• This made for outperformance in the Hang Seng, while the Shanghai Composite is on course to lodge its first positive session for calendar ’22.
• The strength in Chinese tech and U.S. fiscal speculation left e-minis little changed to 0.4% higher, with the NASDAQ 100 leading gains there.