Hong Kong shares underperformed, equities in China and Australia also dropped, while South Korea’s economy continued to recover

The dollar began Monday on the back foot after weakening last week, while U.S. stock futures fluctuated and Asian equities slipped amid subdued trading volumes impacted by a holiday in Japan. The offshore yuan edged higher.

Hong Kong shares underperformed as HSBC Holdings Plc’s shares fell to the lowest since 1995, dragging the Hang Seng Index about 1% lower. Equities in China and Australia also slipped, while trade data showing a continuing recovery for South Korea’s economy lent some support in Seoul.

Japan’s stock market was shut. The dollar edged lower against its main G-10 peers. Taiwan’s dollar strengthened to a level not seen in seven years. Treasury futures were little changed, with cash bonds not trading until the London open due to the Japan holiday. Crude oil was steady.

In the U.S., investors remain watchful for any signs of progress on a U.S. fiscal stimulus package, while Federal Reserve Chair Jerome Powell will testify before Congress from Tuesday to Thursday to discuss pandemic relief efforts.

We do have concerns down the stretch about the markets reacting poorly to some of the uncertainties facing us — the election, potentially around Covid-19, and the fact that we don’t have a stimulus package yet, Rebecca Felton, senior market strategist at Riverfront Investment Group, said on Bloomberg TV. I would have to think we could be volatile to the downside here.

Despite global equity valuations remaining close to an almost two-decade high, fund flow data show money is continuing to move into U.S. stocks. With the Fed anchoring interest rates near zero for the foreseeable future, profits are expected to recover somewhat from the pandemic-induced malaise.

We’ve been reasonably optimistic toward the equity market for quite some time, Jun Bei Liu, fund manager at Tribeca Investment Partners, said on Bloomberg TV. The fundamental economic recovery seems to be on track. Over the next 6-12 months we do see substantial earnings improvement.

Elsewhere, the European Central Bank has launched a review of its pandemic bond-buying program to consider how long it should continue and whether its exceptional flexibility should be extended to older programs, the Financial Times reported.