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Emerging Asian markets ETFs had benefited the most from the recovery, with most of the indices up, Malaysia was up 1.2% and Indonesia and Thailand was up 2.7%.
The key driver in the US bourses was due to the drop in the unemployment benefit, erasing some of the concerns on the job front.
Despite this short relief, the focus tonight will be on the US employment report to confirm whether this trend is dismissible or just a deeper issue. The labour market is a significant focus for global investors as it is the fundamental driver and state of health in the US economy. There is a need for it to have traction due to the Fed’s removal of their accommodative stance.
Emerging Asian markets have held up throughout this volatile period. The answer lies in the manufacturing PMI Markit published which showed improvements in most of the countries, notably Vietnam and Taiwan. Looking at the GDP of these countries, it is clear there is a slowdown in some areas such as Singapore and expansion in others i.e. Taiwan in the last quarter of 2013.
As a whole, the region is forecast to have a recovery and an increased of manufacturing output. The dependence of the region’s recovery on developed markets means that there is a greater significance for the US to be on track with growth this year.
While the slowdown in China has shocked the markets, the HSBC Hong Kong PMI for January showed growth in new orders and output. The data has been the strongest in 23-months, with new businesses from mainland China. This shows that China’s manufacturing might be in contraction and the demand for goods remain healthy.