Asian Equities Show Signs of Rebound

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EUR/USD Potential Trend Reversal

Asian equities were off to a shaky start, trying to recover from the bout of selling that ensued after China recently printed weaker than expected economic data. Risk appetite is still relatively weak in the past few hours, as airline authorities struggle to locate the missing Malaysian Airlines plane.

In today’s Asian trading session, the Bank of Japan released its monetary policy announcement and made no changes to interest rates or its stimulus program as expected. This led to a 0.7% gain as of this writing for Japan’s Nikkei index a few moments after the announcement.

Other Asian markets also showed decent upticks, with the Hong Kong Hang Seng index chalking up a 0.2% gain. The Shanghai Composite Index made a 0.3% uptick while Sydney’s S&P/ASX200 closed up 0.3%. Seoul’s Kospi indicated a 0.1% gain while Taipei’s Taiex is looking at a 0.3% increase.

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Equity Markets Outlook

With barely any surprises from central banks or news events, equities are likely to show small gains in today’s trading sessions. In the UK, the BOE inflation report hearings are lined up along with the release of the manufacturing production report. This might spark movement among British stocks, as a bit of weakness is eyed after the weaker than expected BRC retail sales monitor release. The report showed a 1.0% decline following the previous 3.9% gain.

Apart from the uncertainty stemming from the Malaysian Airlines investigation and the ongoing conflict in the Ukraine and Crimea, markets are also tense because of China’s bank lending and total social financing data. In particular, the data showed a sharp decline from the January figures, prompting concerns of a credit crisis in the world’s second largest economy. Recall that a large company in China already declared a corporate bond default last month.

Over in the US, data is still light so expect sideways movement among most equities, unless there are significant updates that could impact risk sentiment.

To contact the reporter of the story: Jonathan Millet at john@forexminute.com