Investing.com - Financial Markets Worldwide
🧐 ProPicks AI October update is out now! See which stocks made the listPick Stocks with AI

Risk-On Extends As U.S. Considers Tariff Rollback

ByCity Index
AuthorMatt Simpson
Published 11/05/2019, 02:14 AM
GBP/USD
-
AUD/JPY
-
AXJO
-
JP225
-
AAPL
-
DXY
-
USD/CNH
-
Daily % Candles

FX Brief:

  • AUD is today’s strongest major after RBA held rates. AUD/JPY is the biggest mover of the session and its daily range has spanned 95% of its 10-day ATR – given it remains beneath key resistance, we may need another catalyst for risk-on to break higher.

    Reports that the U.S. was considering removing tariffs on $120 billion of Chinese goods was also supportive for AUD and NZD pairs.

  • Trade optimism saw the yuan appreciate further, taking USD/CNH to a 60-day low.

  • DXY nudged its way to a 4-day high after yesterday’s rebound from key support.

  • GBP/USD is stuck at yesterday’s, with potential for further downside given Friday’s bearish pin bar and Monday’s bearish engulfing candle.
    • Asian Cash Indices % Change

    Equity Brief:

  • Risk on mode has continued to prevail in key Asia stock markets that have recorded modest gains between 0.15% to 0.70% except for Japan’s Nikkei 225 that has surged by 2%, more of a “catch-up play” due to a holiday closure yesterday.

  • Continued bout of U.S-China trade deal optimism news flow seems to be the catalyst as a media report has cited that the White House is considering rolling back the 01 Sep tariffs imposed on $112 billion of Chinese imports, one of the sticking points that China has requested before any trade deal is being finalized.

  • Also, China's central bank PBOC has continued to provide liquidity by cutting its medium-term lending facility (MLF) by 5 bps to 3.25%, the first cut since early 2016. Perhaps such liquidity injection has managed to offset the expected negative reaction from China’s weak services sector activities. The Caixin China Services PMI has slipped unexpectedly to 51.1 in Oct (versus the consensus forecast of 52.8) from 51.3 recorded in Sep; the weakest pace of growth in the services sector since Feb 2019.

  • The technology sector has led the gains in the Hong Kong stock market for today where AAC Technologies, a supplier of Apple (NASDAQ:AAPL) has surged by 3.5% to hit a 6-month high of HKD 53.30; the stock has rallied by 60% from its Aug 2019 low of 32.85.

  • The performance of Australia’s ASX 200 was tepid due to a dent in overall sentiment by Westpac Banking Corp, one of the “Big 4” banks that plummeted as much as -5.1% to A$26.46 after a trading halt was lifted from yesterday, the biggest drop since Nov 2018. Westpac had completed a discounted A$2 billion equity placement where the issue price was at A$25.32 per share which was a significant 9% discount to its closing price on last Fri, 01 Nov.

  • Oversea-Chinese Banking Corp (OCBC), a major component stock in the Singapore’s Strait Times Index (STI) has shed by -0.36% so far after it has reported a fall of 6% on its Q3 profit due to a one-off charge for Indonesian unit.

    • Up Next:

  • UK manufacturing PMI is expected to contract at a slower rate of 49.7, versus 49.5 prior.

  • ISM Non-manufacturing could shed further light on whether the U.S. is headed for recession. The manufacturing counterpart has contracted for three consecutive months, yet services remain expansionary. Given we saw manufacturing’s contraction slow this month, it could leave the potential for a positive surprise. USD pairs and U.S. indices are markets to track around this release.
    • Calendar

    Original Post

    Latest comments

    Loading next article…
    Install Our App
    Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
    Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
    Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
    It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
    Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
    © 2007-2024 - Fusion Media Limited. All Rights Reserved.