Market Brief: Risk off is backed with a vengeance
Kelvin Wong August 13, 2019 1:37 AM
FX & Stock market snapshots as of [13/08/2019 0520 GMT]
- In today’s Asian opening session, the China central bank, PBOC has fixed the onshore yuan lower for the 9th straight day at 7.0326 per USD, 115 pips weaker that the previous fix of 7.0211 on Mon. Also, today’s fixing is the weakest since 25 Mar 2008.
- The offshore USD/CNH has continued to hold steady above yesterday low of 7.0882. The rest of the major pairs and crosses have traded blow their respective 10-day average true ranges so far, a low volatility environment without any key economic data releases in the Asian session.
- The EUR/USD is the weakest pair as it traded down by -0.20% from its 5-day range high of 1.1250 since 06 Aug 2019.
- Ahead of the European opening session, all Asian stock markets have tumbled, taking the cue from a weak performance seen in the key U.S. benchmark indices where the S&P 500 and Nasdaq 100 declined by -1.49% and -1.11% respectively on Mon.
- Negative feedback loop in sentiment is the main catalyst. The on-going Hong Kong protests that have escalated into a higher scale yesterday after a disruption to Hong Kong’s airport operations with a plan to stage another massive protest in the streets this coming Sunday. In addition, contagion from emerging markets is on the rise that saw Argentina’s stocks and currency collapsed to record lows on Mon after disappointing primary election result for the incumbent Argentine President.
- China officials have described the latest unrest in Hong Kong as a sign of terrorism emerging”. Also, media reports have highlighted the sighting of large-scale China’s armed police force personnel and vehicles that have assembled in Shenzhen, city bordering Hong Kong. The risk of military styled intervention from China has increased at this juncture.
- Singapore’s trade ministry has slashed this year GDP growth forecast to 0%-1.0% from previous projections of 1.5%-2.5% due to a challenging external environment.
- The S&P 500 E-mini futures are almost unchanged in today’s Asian session with a tight trading range between 2889 and 2880.
- Germany CPI for Jul at 0600 GMT where consensus is set at 1.1% y/y, unchanged from Jun
- Germany ZEW economic sentiment survey for Jul at 0900 GMT where consensus is at -30.00 down from -24.5 in Jun.
- U.K. Unemployment Rate for Jul at 0830 GMT where consensus is expected 3.8%, unchanged from Jun.
*Data from Refinitiv. Index names may not reflect tradable instruments and not all markets are available in all regions.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.