Will upbeat US data outweigh rising Covid-19 fears in Asia?

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Upbeat US Data Currently Outweighs Covid-19 Fears in Asia, Though China's Recovery Faces Scrutiny

Asian markets were positioned to mirror Wall Street's positive performance, with the optimism generated by strong United States economic indicators currently overshadowing concerns about escalating Covid-19 infections. Investors are taking cues from robust US housing data and anticipate further positive employment figures, though attention is also fixed on China's upcoming Purchasing Managers' Index (PMI) which may signal a slowdown in its economic recovery.
Asian Markets Show Initial Gains on Positive US Sentiment

Futures for the Australian S&P/ASX 200 saw a rise of 1.15 per cent, while Japan's Nikkei 225 futures increased by 0.11 per cent. Hong Kong's Hang Seng index futures also climbed, indicating a generally positive start for Asian equities. This upward movement reflects investor confidence bolstered by recent US economic releases, including a rebound in home sales.
China's Economic Recovery Faces Potential Stalling Concerns

Focus in Asia is also directed towards China's official PMI for June. While it is projected to indicate a fourth consecutive month of factory activity growth, the anticipated slower pace has raised concerns that the world's second-largest economy might be experiencing a deceleration in its recovery. This comes amidst a global backdrop where rising Covid-19 cases, particularly in the United States and Latin America, have stoked fears of stalled economic recoveries.
Global Equities and US Markets Showed Gains

Globally, MSCI's index tracking stocks across various regions advanced by 0.72 per cent on Monday, driven by strong performances on Wall Street. The Dow Jones Industrial Average rose by 2.32 per cent, the S&P 500 gained 1.47 per cent, and the Nasdaq Composite added 1.2 per cent. These gains suggest a broader investor sentiment favouring equities despite the ongoing health concerns.
US Dollar Strengthens Amidst Global Uncertainty

In currency markets, the US dollar maintained its strength against the Japanese yen and Swiss franc. This resilience is attributed to the recent increase in coronavirus cases globally, which has historically supported demand for the dollar as a safe-haven asset. China's yuan remained stable against the dollar in offshore trading as markets awaited the release of the PMI data.

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Will upbeat US data outweigh rising Covid-19 fears in Asia?

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