Asian markets on the rise on restored trade optimism

15 November, 2019

Most Asian equities and currencies are in the green after another record close for the S&P 500, as White House economic adviser Larry Kudlow teased markets saying that the US and China are “getting close” to a trade deal and that it’s “coming down to the short strokes”. Although investors have taken some risk off the table in recent days, the gains seen in safe haven assets appear to be contained for the time being. Gold’s latest climb was capped at $1475, US 10-year Treasury yields bounced off the 1.80 mark, while the Japanese Yen strengthened to 108.24 versus the US Dollar before giving up some of its advances.

While waiting for more details on the highly-anticipated “phase one” trade deal, investors were served with another round of downcast economic data out of the US, Europe, and Asia. The dismal figures are yet another reminder to markets about the sheer importance of a US-China trade deal to the global economic outlook; that deal is essential to reviving hopes of a global economic recovery. After all, investors’ patience has its limits, and cracks had already begun to show in risk sentiment.

US retail sales print in focus as Dollar eases


The Dollar index has eased below the 98.2 mark, even as Fed chair Jerome Powell touted the merits of the US economy before Congress, describing it as a “star” performer. Powell’s comments came as investors were fed with US economic data showing higher-than-expected producer prices and jobless claims.

Still, the broader narrative surrounding the world’s largest economy is one of its resilience, despite the ongoing slowdown. A healthy jobs market that’s supportive of domestic consumption, amid subdued inflation, suggests that the Fed is likely to keep US interest rates at current levels for the foreseeable future. With that context in mind, the upcoming October US retail sales figures will serve as an important barometer on the health of the US economy, where anything short of the expected rebound from September’s surprise contraction could deflate the Dollar further.

Brent reverses decline on trade optimism


Oil prices are reversing some measure of recent losses, as traders continue to pin their hopes on a US-China trade deal being sealed by year-end. Rising US stockpiles, encouraged by record shale output, suggest that the world will see excess Oil supplies going into 2020, with such prospects having dampened Oil prices. Even the longer-term outlook doesn’t bode well for Oil bulls, with the IEA recently predicting that global Oil demand will peak by 2030.

Still, over the near-term, Oil prices are like a coiled spring waiting to be sprung by concrete details pertaining to the “phase one” trade deal. As a finalised agreement becomes likelier, Brent futures is expected to be set on a path above $65/bbl.


Source  
What's next after Q2 rally?1 Jul, 2020  

Risk appetite is stepping hesitantly into the second half of the year, with Asian stocks edging higher while US futures slipped into the red...

FX Scorecard: Winners and Losers of 2020 so far30 Jun, 2020  

So much has happened since the start of 2020. The shocking events across the globe sparked explosive movements across currency, commodity and stock...

Markets still sensitive to Covid-19 fears29 Jun, 2020  

US stocks are set to pare some of Friday's declines, with futures edging into positive territory at the start of the week. Asian stocks are however lower...


More volatility ahead as virus spreads29 Jun, 2020  

Coronavirus deaths topped 500,000 worldwide, is the first headline to grab investors' attention this morning. The mission is unaccomplished and the virus...

Stock market star to scandal26 Jun, 2020  

Market sentiment is mixed today with US stocks opening lower, but so far being well supported by the widely watched 200-day moving average...

The Russell Rebalance Roiler?26 Jun, 2020  

US stock markets could see a massive spike in trading volume today, as the Russell indexes reconstitution takes place. The once-a-year process...


The bull market is showing signs of weakness25 Jun, 2020  

One of the biggest lessons learnt over the past three months is to respect the trend. Whether you believe the economy will go through a V, U, W, L or whatever...

Is tariff man back?24 Jun, 2020  

Risk appetite has suffered today in choppy and changeable market conditions. News that the Trump Administration is considering the imposition of tariffs on $3.1bn...

Rising tide lifts (almost) all boats24 Jun, 2020  

As we take stock of what has transpired in global markets this quarter, risk sentiment has certainly made a remarkable comeback despite the coronavirus pandemic...