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  • Markets in Asia attempt tracking Wall Street’s gains but challenges to risk fade the upside move.
  • US-EU trade wars renew, Sino-American tussle remains in place.
  • Virus conditions, stimulus deadlock add uncertainty to the global outlook.
  • The latest economics from the US, China, Japan and Australia suggest upbeat scenarios.

Asian equities repeat the on-and-off pattern while defying the previous day’s losses with mild gains ahead of Thursday’s European session. MSCI’s index of Asia-Pacific shares outside Japan gains 0.38% while Japan’s Nikkei 225 rallies over 2.0% to 23,300 by the press time.

Although upbeat prints of Japanese Producer Price Index (PPI), Aussie employment data and Chinese Retail Sales follow the welcome inflation figures from the US, worries concerning the American stimulus challenge the risk-on mood. Also acting as the upside barrier is the doubt over the recent declines in the US coronavirus (COVID-19) cases after news unveiled a reduction in testing. Furthermore, the Trump administration’s tariff attack on Europe, over the airbus case, joins the show of stealth bombers near Vietnam to mark the additional burden on the risk-tone sentiment.

On the other hand, US President Donald Trump rekindled hopes of V-shaped recovery but markets can’t believe amid the extension of trade-negative measures from America.

It should be noted that the virus cases from Australia’s Victoria recede. Though, ASX 200 drops -0.78% amid fears of fresh US-China tension. Alternatively, New Zealand’s NZX 50 manages to print 0.20% gains despite increasing pandemic numbers at home and PM Jacinda Ardern’s pessimistic signals.

Further, Chinese stocks struggle for a clear direction amid a light calendar and US criticism whereas those from Indonesia, India and South Korea remain slightly positive following the broad trend.

Looking forward, traders will keep eyes on the risk catalysts from the US, also concerning the global trade mechanism and coronavirus, amid a light calendar. However, tomorrow’s China data dump will be the key to follow.