Market News & Analysis

Market Brief: Profit Taking Ahead Of "Phase One" Details


View our guide on how to interpret the FX Dashboard

FX Brief:

  • Quiet ranges across the FX space, although most of the action was seen prior to the Asia open following weak employment data from NZ. With employment becoming a mandate for RBNZ, rising unemployment saw traders increase the odds of a rate cut to around 60% and weigh on NZD crosses.
    Notice that AUD is the strongest major following poor NZ employment data, as expectations for RBA to cut next month remains below 10% (hence why AUD/NZDF is sniffing around a key breakout level).
  • FX pairs remained in tight ranges overall, with pairs averaging around 38% for their ATR’s. Hopefully this leaves a few pips on the table for moves throughout the European and US sessions.
  • USD/CNH remains below 0.7000 (just), EUR/USD sits on key support, EUR/GBP is considering a break lower. USD/JPY its just below 109.31 resistance as it considers a breakout. Let’s just hope these trade talks don’t reverse again otherwise markets will simply do the same.
  • BOJ Sept Meeting Minutes: Members to pay closer attention to the chance momentum has been lost towards CPI target (basically, watch data closely as further easing is now on a meeting-by-meeting basis).

Equity Brief:

  • Key Asian stock markets have started to see profit-taking activities as traders wait for more positive catalysts on the impending U.S-China “Phase One” trade deal agreement to be signed off by Trump and Xi.
  • One of the sticking points is that China has requested U.S. to roll back some of the imposed tariffs in Sep as well as eliminate any new tariffs before any agreement can take place. So far, there is no clear take on this request from key U.S. officials.
  • The worst performer as at today’s Asian mid-session is Australia’s ASX 200 where it has dropped by -0.57%. Almost all sectors are trading in the red except for Basic Materials. The worst performer are industrials related stocks; the Industrial sector has tumbled by -1.8% follow by the Technology sector downed by -1.5%.
  • Singapore’s Straits Times Index (STI) has managed to inch out a modest gain of 0.35%, on track for a third consecutive session of gains led by Hongkong Land and Jardine Matheson Holdings that have rallied by 3.13% and 2.40% respectively.
  • Meanwhile, Japan’s services sector has shrunk for the first time in three years in Oct. The finalised Jibun Bank Japan Services PMI dropped to 49.7 in Oct from 52.8 in Sep due to the negative effectives caused by the recent powerful typhoon and a sales tax hike.
  • The S&P 500 E-Mini futures is almost unchanged in today’s Asian session after a drop of -0.12% seen in the S&P 500 cash index at the close of yesterday, U.S. session.   

Matt Simpson and Kelvin Wong 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.