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China's Markets Close for Mid-Autumn Festival, Anticipating National Day Holiday
Mainland Chinese markets will be closed from September 25 to September 27 for the Mid-Autumn Festival, with trading set to resume on September 28. Following this short break, markets will again close for the week-long National Day holiday from October 1 to October 7. These closures are significant as they create a gap in the Asian trading session, which has grown more pronounced due to China's increasing influence in global markets.
The absence of Chinese trading activity impacts various asset classes. With the onshore yuan and commodity futures markets offline, offshore markets will handle price discovery with reduced depth. This is particularly relevant for iron ore, which is closely linked to the Australian dollar, as trading shifts to the thinner Singapore contract. Additionally, gold prices may be affected due to the closure of the Shanghai Gold Exchange, which typically sees substantial demand from Chinese buyers.
As trading volumes decrease during these holiday periods, market reactions to news can become more volatile. Traders often adjust their positions ahead of long breaks, which can lead to increased price swings in the days leading up to the holidays. This time, the market backdrop is particularly busy, with fluctuations in oil prices, rising US Treasury yields, and expectations of a rate hike from the Reserve Bank of Australia, all contributing to a potentially turbulent trading environment in early October.
Source: KLEA News