Equity Brief: Asian stocks gain on Fed's dovish safety net

A summary of the stock market trends & highlights from today's Asian mid-session.

Stock market snapshot as of [19/07/2019 0430 GMT]

  • Ahead of the European opening session, Asian stock markets have staged a recovery from yesterday’s losses after New York Fed official Williams has made a dovish remark on the need for a swift 50bps cut on the Fed funds rate in yesterday, 18 Jul U.S. session. Based on the CME Fed Watch tool, the Fed funds futures has priced in an increased probability of a 50bps in the upcoming 31 Jul FOMC meeting to 46.2% from 19.9% a week ago. Interestingly, the New York Fed has clarified that Williams is not sending a specific policy signal and rather Williams’s speech is focused on an academic research perspective.
  • The best performer is Japan’s Nikkei 225 where it has rallied by 1.84% led by the semiconductor sector where the shares of key chipmakers; Advantest and Tokyo Electron surged by 4.6% to 6.5%. These gains have been triggered by a positive feedback loop from Taiwanese major chipmaker TSMC’s positive revenue outlook despite the on-going trade tensions between U.S. and China.
  • The S&P E-mini futures has continued to maintain yesterday’s U.S. session positive momentum where it has inched up higher by 0.35% in today’s Asian mid-session to print a current intraday high of 3008. Watch the intermediate resistance at 3012 which is the pull-back resistance of the former “Ascending Wedge” support from 27 Jun 2019 low and the 76.4% Fibonacci retracement of the recent decline from its all-time high to 18 Jul 2019 low.
  • European stock indices CFD futures are joining in the bullish bandwagon where both the FTSE 100 and German DAX are up by 0.50% and 0.69% respectively. Key intermediate resistance to watch on the DAX will be at 12430/490 (61.8% Fibonacci retracement of the recent decline from 03 Jul high to yesterday, 18 Jul low)

Macroeconomic Calendar

*Data from Refinitiv. Index names may not reflect tradable instruments and not all markets are available in all regions.

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