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  • Asian equities stay sluggish with gains in China and Japan drowned by the rest.
  • China’s Caixin Manufacturing PMI recovered, Japan’s Q1 GDP confirmed a 2.2% contraction.
  • Coronavirus woes remain on the table, US policymakers failed to hammer out a new stimulus plan.

Asian shares remain mixed with the notable gains at the majors failed to overcome losses by the others. The reason could be traced from the latest consolidation in global markets and the US dollar recovery despite American policymakers’ failure to agree over the much-awaited fiscal package. Portraying the market sentiment, the MSCI index of Asia-Pacific shares outside Japan drop over 0.5% while Japan’s Nikkei 225 rises 2.13% to 22,172 during the pre-European session on Monday.

The American Senators are not only struggling with the final outlay of the aid package but also crossed the expiry of unemployment claims benefits. Even so, the US dollar index (DXY) carries the bounce from over a two-year low while taking rounds to 93.42 as we write. The moves could be traced by Wall Street’s upbeat performance during the late last week as well as the consolidation of the coronavirus (COVID-19) numbers around 60,000 in the US.

Elsewhere, Japan’s final Q1 GDP matched 2.2% YoY contraction, which in turn raises the hopes of further stimulus and propel the equities at home. The second-best winner, Chinese stocks, cheered upbeat readings of Caixin Manufacturing PMI, up from 51.3 forecast to 52.8.

Even so, global rating giant Fitch’s degrade of the US credit outlook from stable to negative joins Victoria’s “state of disasters” to weigh on the ASX 200. The Aussie index declines 0.30% to 5,909 by the press time. In the same line, Indonesia’s IDX Composite drops over 2.5% after the Asian nation’s inflation data marked downbeat figures. Further, Hong Kong’s Hang Seng and India’s BSE Sensex shed near 1.0% as pandemic woes fail to recede.

Moving on, the US 10-year Treasury yields remain directionless near 0.548% and so do the S&P 500 Futures.

Market players will keep eyes on the early-month PMIs for fresh clues. In doing so, risk catalysts can also play their role whereas virus updates and US Senate actions will be the keys to watch.