Yesterday's China stock market rout, in which the Shanghai Composite tumbled the most since June 2016 to three month lows, and which prompted traders to question the dedication of Beijing's plunge protection team, appears to have been forgotten, with the Composite closing unchanged on Friday after some early session weakness, as Chinese yields declined broadly across the board from 3 years highs.
Global shares hit another record high on Wednesday, propelled higher by what increasingly more call (ir)rational exuberance, and investors’ unflagging enthusiasm for tech stocks. That said, S&P futures are unchanged the morning before Thanksgiving (at least before the market open ramp), as are European stocks (Stoxx 600 is flat), despite the euphoria in the Asian session which saw the MSCI Asia Pac index hit a new all time high...
The global risk levitation continues, sending Asian stocks just shy of records, to the highest since November 2007 and Japan's Nikkei topped 22,750 - a level last seen in 1992 - while European shares and US equity futures were mixed, and the dollar rose across the board, gains accelerating through the European session with EURUSD sumping below 1.16 shortly German industrial output shrank more than forecast, eventually dropping to the lowest point since last month’s ECB meeting.
Following an early shaky start, which saw the Hang Seng tumble as much as 1.6% driven by weakness in financials and real estate names following the latest warning by PBOC governor Zhou about "sudden, complex, hidden, contagious, hazardous" risks In markets and a decline in local real estate prices, and pressure global risk, US equity futures have recouped all losses and are back to unchanged on monday morning, as President Trump continues on his first official trip to Asia.
Yesterday's brief late night dip in ES has been promptly bought with US equity futures fractionally lower, Asian shares inching higher on Thursday and Europe unchanged ahead of today's Super Thursday, where we get the Republican tax bill revealed shortly before noon, the BoE's rate hike announcement, and Trump appointing Jay Powell as the next Fed chair, as well as as earnings from companies including Apple and Starbucks. With the dollar dropping slightly, markets seem to have taken a shine to the euro and EM FX, specifically your high beta currencies.