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Asia Wrap: Risk Is On But The Market Is Caught Long Duration

Published 10/11/2019, 05:18 AM
Updated 07/09/2023, 06:31 AM
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Friday's session in Asia saw shares climb from Tokyo to Sydney after President Donald Trump said discussions with China are going "really well" and will continue Friday. Stocks in Hong Kong got an extra lift as protesters discussed scaling back violence ahead of planned protests this weekend. The pound holds firm buttressed by a definitive pathway to a Brexit deal.

The possible Yuan accord has triggered persistent USD/CNH and USD/KRW selling by some big names perhaps driven by hedge funds and asset manager flow. The Aussie dollar traded well amid increasing optimism around US-China trade talks.

Positive sentiment from Asia should carry over into European session as optimism over Brexit and US-China trade talks could continue to support risk assets further.

My biggest concern, however, is the market is still very long duration, and a more intense pain trade is yet to play out in bond markets.

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