Market Brief: Mild Risk-On From Trade Optimism
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- NZD spiked lower on comments from New Zealand’s Treasury that they suspect S&P may remove their positive ratings outlook. Still, it currently trades just off a 2-day high.
- US Treasury are considering whether to further delay tariffs on $34 billion in Chinese goods, allowing USD to remain supported on trade optimism.
- DXY (US dollar index) trades in a narrow range and within yesterday’s bearish candle, AUD/USD hit s 3-day high and USD/JPY briefly touched an intraday 3-month high.
- AUD and NZD are the strongest majors. All pairs remain well within their typical daily ranges, with the overall average daily range at just 39% of its 10-day ATR.
- Most Asian stock markets have continued to extend their gains in place since last week reinforced by the increased possibility of a “Phase 1 U.S-China trade deal” being signed off by mid Nov when President Trump meets his counterpart, China’s Xi at the APEC Summit on 16-17 Nov. In addition, key U.S. benchmark stock indices; the S&P 500 and Nasdaq 100 have also broken new record highs.
- Singapore’s Strait Times Index (STI) has continued to rally for a 3rd consecutive session after a public holiday break yesterday, it is upped by 0.53% as at today’s Asian mid-session ahead of the big three banks Q3 earnings releases with UOB out on Fri, 01 Nov follow by OCBC on 05 Nov and lastly, DBS on 11 Nov.
- The current up move of the STI has hit a 3 -month high of 3227 on an intraday basis led by Jardine Matheson Holdings and Jardine Strategic Holdings that has rallied by 2.5% and 1.7% respectively.
- Hong Kong’s Hang Seng Index has continued to underperform, down by -0.40% after its failure to breach above the 27000 psychological level. Banks and heaving weight component stocks are the main drag where HSBC and Hang Seng Bank have declined by -1.66% and -1.57% respectively. Asia largest technology firm, Tencent which is also the 2nd largest component stock in the HSI has shed -1.49% to print an intraday low of 317.00, a whisker away from a major support level of 316.80.
- In addition, a Hong Kong key official, Financial Secretary Paul Chan has written a blog post that has highlighted the 4-month long street protests have caused Hong Kong to enter into a technical recession; Hong Kong will announce its Q3 GDP data on Thurs, 31 Oct.
- UK parliament are set to vote again on Boris Johnson’s proposed Dec 12th election, GBP crosses will be the main focus.
- Quiet in terms of economic data, so ranges may be limited without a catalyst.
- RBA's Governor Philip Lowe is due to speak at 6:45am GMT
Matt Simpson and Kelvin Wong both contributed to this articleData from Refinitiv. Index names may not reflect tradable instruments and not all markets are available in all regions.
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