Market Brief: Stimulus Hopes Support Risk Appetite (For Now)


A summary of news and snapshot of moves from today’s Asia session.

  • AUD and NZD are today’s strongest major after the release of RBA's August minutes. Whilst little new could be gleaned from them, the lack of any dovish surprise helped support the Aussie after their release.
  • Narrow ranges once again overall due to the lack of first tier data. However, a cautious approach is expected ahead of the Jackson Hole symposium and keynote speeches from Central Bank governors.
  • PBOC Vice Governor Liu says future interest rate policy focus will be on LPR (loan prime rate), and benchmark rates may not be changed over the near-term

  • Ahead of the European session open, most Asian stock markets have continued to inch higher for the second consecutive day on the backdrop of more stimulus hopes from major developed central banks.
  • The Australia’s ASX 200 and South Korea’s Kospi 200 are the star performers as at today’s Asian mid-session where both indices have rallied by close to 1.00%.
  • The outperformance seen in the ASX 200 has been led by the energy sector which has gained by 2%. Over at Kospi 200, the energy and technology sectors are leading with gains of 1.87% and 1.43% respectively. In addition, the on-going optimism seen in the South Korean’s stock market has been fuelled by a positive regulatory news flow where the Vice Finance Minister has announced today that South Korea may consider easing market restrictions on share buy-backs, while tightening short-selling rules to stabilise local markets.
  • The S&P 500 E-mini has inched up higher by 0.21% in today’s Asia session after three days of consecutive gains since last Thurs, 15 Aug. Overall, the U.S. stock market has almost recovered the losses inflicted by the yield curve inversion seen on the 10 year and 2 year Treasuries (US govt bonds) on last Wed, 14 Aug.

Up Next:

  • German producer prices were flat in the month of June and the YoY% rate is polled to drop to 1% (from 1.9%) to take it to its lowest rate of growth since December 2016.
  • Late US session sees dairy prices and milk auctions, which puts NZD crosses on trader’s radars.

Matt Simpson and Kelvin Wong both contributed to this article. 

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 or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account