Asia Equities
Apple (NASDAQ:AAPL) jumped more than 4% in after-hours trading post strong Q2 earnings to beat investors’ expectations, but so far Asia equity markets have failed to ride the heavyweight giants coat tails as local markets are not exactly having their day in the sun as lingering adverse effects from President Trump's inflammatory trade comments continue to weigh on local equity market sentiment.
But trader's remains on a heightened state of alert as headlines from Shanghai will catalyze market moves.
However, the broader markets are in risk reduction mode, making price discovery and exercise in futility. The mini rollercoaster coaster ride is expected to continue as the two competing narratives, the dovish Fed and Trade war doubts jockey for position ahead of FOMC.
Politburo
The main takeaway from yesterday's much-awaited mid yer Politburo meeting is that we should expect more liquidity provision but no rate cut. As well, policymakers have no intention to go back to the well and use property policy as a short-term economic stimulus — not the worst but certainly not the best outcome for global risk and local equity markets.
Australian Dollar
AUD/USD has traded up after the Australia CPI release. AUD/NZD is up to 1.0438 after testing multi-month support at 1.0380-90. The push higher in the AUD could be little more than a temporary relief rally given the magnitude of shorts AUD/USD positions in the markets. The tiny uptick in CPI does not change the negative landscape. Also, traders will most likely not favor heading into the FOMC long G-10 peripherals.