View our guide on how to interpret the FX Dashboard
- Trade optimism made a return at the end of the week in Asia, after White House economic advisor Larry Kudlow said that US and China were close to a trade deal. (Getting that familiar feeling of déjà vu yet again…). Well, believe it or not, equities liked it and we saw carry trades come back into fashion.
- BOC’s Poloz said that wage inflation is now above 4% in most measures. Meanwhile RBNZ’s governor Orr reiterated their stance that rates need to remain low for a long time, adding that future policy guidance is important. Assistant governor Hawkesby says that their next meeting in February is ‘live’.
- Commodity currencies (CAD, AUD and NZD) are the strongest majors of the session, JPY and CHF are the weakest. This places carry trades at the top of the leader board for the session, with CAD/JPY, AUD/JPY and NZD/JPY leading the pack. At the other end, GBP/CAD and USD/CAD are the weakest pairs.
- No pairs have met or exceeded their ATR’s today, which leaves potential for moves in the European or US sessions without imminent concerns of over extension.
- Key Asian stock markets have started to trade higher as at today’s Asian mid-session with hopes (again) that the U.S-China “Phase One trade deal” sign-off will gain traction soon. White House economic adviser Larry Kudlow has told media after an event at the Council on Foreign Relations that the Phase One deal is downed to the “short strokes”.
- Th best performers so far, South Korea’s Kospi 200, Australia’s ASX 200 and Japan’s Nikkei 225 which have rallied by close to 0.70% to 1.00%.
- The ASX 200 is now eying a 2nd consecutive session of gains led by gold mining related stocks; Dacian Gold and Saracen Mineral which have rallied by 5.1% and 2.7% respectively.
- Cautious trading in Hong Kong stock market as the Hang Send Index has only posted a modest gain of 0.30% where participants are more concerned on the economic fallout from the escalation of the on-going anti-government demonstrations over the coming weekend.
- Singapore’s Strait Times Index (STI) has not jumped onto the trade deal (hope) bandwagon as it is almost trading almost unchanged; dragged down by Singtel which has recorded a decline of -3.30% after it posted a S$668 million loss on provision due to its Indian associate, Bharti Airtel’s claims from the Indian government where the Supreme Court in India has ordered telecom operators to pay the state billions in past dues.
- The S&P 500 E-Mini futures has rallied in Asia session with a gain of 0.34% to print a current intraday high of 3110 (fresh all-time high) after Kudlow’s positive comments on the U.S.-China Phase One trade deal.
- US retail sales contracted by -0.3% in September, its first negative print since February. Another negative print today could point towards concerns that weakness from the manufacturing sector is spreading to the wider economy. Keep an eye on USD to see if it retraces further, in line with what price action currently suggests.
Matt Simpson and Kelvin Wong both contributed to this article Data from Refinitiv. Index names may not reflect tradable instruments and not all markets are available in all regions.
From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.