Strong downward correction in Asian equities

Record-high level for US equities on Friday, but strong downward correction in Asia overnight, after Chinese authorities announced a broad set of reforms for private education companies “hijacked by capital”. They will be banned from making profits, raising capital or going public. These measures are coming in the wake of a broader campaign against the growing power of Chinese tech companies.

US bond yields are down (below 1.25% for the “10y”) in this context, but also because the Fed meeting (Tuesday-Wednesday this week) fuels come uncertainty. The quick spread of the pandemic continues to be a source of concerns for markets but it is important to underline that the number of new Covid cases has now declined for the 5th day in a row in the UK, suggesting the peak has been reached, while new admissions to hospitals have remained contained.

The German IFO survey will be released this morning. The EUR/USD exchange rate has stabilized around 1.1780.

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