Honestly, I’m struggling with this one.
The US shot down a Chinese balloon, although as an overall market driver beyond this week, we suspect it will float by.
Still, the implication and escalation around the US-China tech war can not be ignored.
Chinese stocks are lower, but the Yuan, which is likely a better benchmark to judge the market rerating of a full-blown political fiasco, is not raising any red flags yet.
Besides being a ridiculous spectacle along the lines of a made-for-Twitter show of force, why on earth the US had to morph into Top Gun mode to take to a Weather Balloon is beyond me, and undoubtedly entering the theatre of the absurd. In other ways, it was the only thing Biden could have done. The US is locked in a technology and military superiority race, and the stakes could be higher, so Optics matter.
Top Australian Brokers
- eToro - market-leading social trading platform - Read our review
- IG - Extensive product array and user-friendly platforms - Read our review
- IC Markets - experienced and highly regulated - Read our review
- Avatrade - powerful trading tools - Read our review
Asia stocks are suffering from the intense NFP hangover and getting further hit after the Biden administration decided to postpone Secretary of State Antony Blicken’s upcoming trip to China in light of popped balloons.
But one asset that does get a lift from deflating weather balloons is gold which always finds a friend in US-China geopolitical risk.
