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  • Asian equities struggles for clear direction as economic hopes confront US-China tension.
  • The US passes the bill to levy fresh sanctions on China, officially term Hong Kong “not autonomous.”
  • China stays ready to retaliate but no clues are out so far.
  • New York Fed’s signal for QE offers motivational background music.

Shares in trade mixed as expectations of the economic restart coexist the political/trade tension between the US and China. Against this backdrop, the MSCI’s index of Asia-Pacific shares, ex-Japan, drops 0.97% but Japan’s NIKKEI flashes 1.5% gains to 21,730 during the pre-European session on Thursday.

After officially showing intention to take back Hong Kong’s preferential trading status, the US House passes a bill to levy sanctions on the Chinese diplomats involved in the Xinjiang case. Additionally, the US Trade Representative’s (USTR) office said to challenge the Court of International Trade’s decision to reinstate tariff exception for certain solar panel imports from China and elsewhere. Amid all these, geopolitical concerns in Hong Kong remain grim, which in turn drags the Hang Sang down over 2.0% to 22,760 by the press time.

Elsewhere, Australia’s ASX benefits from the RBA Governor’s upbeat comments, as rising 1.27% to 5,848, but New Zealand’s NZX 50 couldn’t follow the suit while declining to -1.60% as we write.

The Bank of Korea’s (BOK) expectations of the biggest GDP contraction since the Asian Financial Crisis weigh on South Korea’s KOSPI, down 0.50% to 2,021. Further, Chinese stocks bear the burden of the US rivalry but India’s BSE SENSEX gains over 1.0% on hopes of further stimulus.

The US stock futures are also on the positive side cheering the hopes of Quantitative Easing (QE), as ignited by the New York Fed President John Williams.

Moving on, the markets will wait for how China responds to the US action while a heavy economic calendar during the American session could also entertain traders.