Asia equities are trading lower following the primarily negative handover from Wall Street. The trading sentiment was suppressed on return from the US Labour Day weekend amid weakness in the cyclical sector, rising US Treasury yields and Bitcoin sell-off.
Recent news flow suggests a cautious session ahead, as US Senator Manchin said would only support a maximum of USD 1.5tln in the spending plan, which is considerably below US President Biden’s USD 3.5tln spending plan. The new information could be a further headwind to the US economy, and market participants might revise the growth and fiscal support expectations for the months ahead. From this, if a market theme starts to build up and US economic growth, goods demand and industrial products expectations shrink, it could be a potential risk for global growth and a hit for Chinese exporters, and eventually the China’s economy.
On the China front, the banking sector names could take a hit as the China crackdown continues. Local press is reporting that Chinese commercial banks that have not set up a wealth management subsidiary may not add new wealth management services as officials try to limit financial risks growing out of the sector.
