Asian equities advanced despite weak economic data out of China and Japan
Wall Street stocks jumped on Friday, with tech stocks leading gains. The Dow Jones rose 1.7%, the S&P 500 added 2.4% while the Nasdaq Composite jumped 3.1% but is still about 15% from its record highs. in individual stocks, shares of Apple rallied 7% after the company revealed record revenue even amid supply challenges. On the data front, December’s core PCE jumped 4.9% year-over-year to register the highest reading since 1983.
Following suit, Asian equity markets advanced on Monday despite weak economic data out of China and Japan. China’s official manufacturing PMI slipped to 50.1 versus 50.3 in January, while Caixin PMI fell to 49.1 from 50.9. In Japan, retail sales, industrial production, consumer confidence, and housing starts data came in lower than expected. On the positive side, Japanese PM Kishida said they are not currently considering issuing a state of emergency regarding the pandemic. The Nikkei 225 in Tokyo rose 1.1% during the session.
European stocks climbed but investors stay alert, keeping an eye on developments between Russia and Ukraine. On this front, the UN Security Council meeting will be in focus later today. The pan-European Stoxx 600 index gained 1% in early deals. In the UK, FTSE 100 was last seen rising nearly 0.40% while DAX 30 in Germany rallied 1.3% as the overall risk sentiment keeps improving at the start of the week.
As safe-haven dollar demand has cooled, the USD index continues to retreat from fresh long-term highs seen last week. The index is now approaching the 97.00 figure, with downside risks looking limited for the time being as risk aversion could reemerge at any point. EURUSD bounced from mid-2020 lows around 1.1120 to settle in the 1.1170 area on Monday. Despite some weakness surrounding the greenback, the euro struggled to regain the 1.1200 mark, suggesting downside risks continue to persist in the near term.
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