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- China trimmed their key repo rate for the first time since 2015, which suggests further stimulus from Beijing could be underway.
- Over the weekend, opinion polls showed support for Boris Johnson’s conservative party to be are at their highest levels since 2017, helping to support GBP in Asia. Johnson also pledged to provide up to £1 billion in tax breaks for businesses to help support the economy.
- On Sunday, a Chinese state news wire Xinhua reported that the US and China had “constructive talks”. The US is also expected to extend a license which allows US companies to deal with Huawei by 2 weeks.
- GBP and EUR are the strongest majors, AUD and JPY are the weakest. GBP/NZD and GBP/NZD are today’s biggest gainers. Overall, volatility remains on the quiet side with most pairs daily ranges remaining beneath 50% of their 10-day ATR.
- Mix trading are seen in key Asian stock markets as we kickstart a brand-new week. The on-going anti-government demonstrations in Hong Kong has intensified over the weekend where the police have embarked on a dispersion operation on protestors that are holding the fort in one of the universities. Violent clashes have erupted between protestors and police forces in the last 48 hours.
- The China central bank, PBOC has managed to reverse the negative sentiment via an unexpected cut to the 7-day repo rate to 2.50% from 2.55%, the first such cut in more than four years and a signal that Chinese policy makers stand ready to inject liquidity to prop up growth.The Hong Kong’s Hang Seng Index (HSI) has rallied by 0.80% so far after being the worst performer last week with decline of -4.10% coupled with a modest gain of 0.44% seen in the China A50. The current gain seen in the HSI has been accompanied with a lacklustre volume reading of 575 million shares traded that is lower than the last 5-day of average trading volume.
- Both the South Korea’s Kospi 200 and Australia’s ASX 200 have seen losses of around -0.40%. The ASX 200 has failed to breach above its 3-month high at 6800 on the 2nd attempt dragged down by gold mining and financial stocks where, National Australian Bank, Commonwealth Bank of Australia and Westpac Banking shed between -0.7% to -0.8%.
- After another fresh all-time high print of 3120 on the S&P 500 seen last Fri, the S&P 500 E-Mini futures are trading almost unchanged in today’s Asian session with tight range of 6 points.
- A quiet calendar leaves the potential for smaller daily ranges, unless an unexpected catalyst arrives.
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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