Asian Equities Shrugged Off the Downbeat Wall Street Lead

Asian Equities Shrugged Off the Downbeat Wall Street Lead

Asian Equities Shrugged Off the Downbeat Wall Street Lead

Good Morning CMT

Asian equities shrugged off the downbeat Wall Street lead in what was another quiet session overnight

•             GBP/USD outperformed and jumped on no news ahead of the Tokyo open, which saw the pair trip through stops and prior support at 1.2200

•             Looking ahead, highlights include US and UK inflation figures, Fonterra GDT auction and the API oil inventory report

 

ASIA

Asia equity markets shrugged off the negative Wall St. lead and traded mostly higher, although gains were reserved amid quiet news flow and a lack of catalysts to drive price action. ASX 200 (+0.4%) was led higher by mining names after gold rebounded and iron ore surged nearly 2% to above USD 57.00/ton. Nikkei 225 (+0.1%) recovered from early losses as JPY weakness supported exporters, while index heavyweight Fast Retailing shares gained on China expansion plans. Chinese markets were positive with Shanghai Comp. (+0.5%) and Hang Seng (+0.9%) both higher following further supportive government project announcements and after the Peoples Bank of China increased its liquidity injections.

 

The Peoples Bank of China set mid-point at 6.7303 (Prev. 6.7379)

The Peoples Bank of China injected CNY 40bln 7-day reverse repos and CNY 40bln in 14-day reverse repos.

 

EUROPE/U.K

Portugal are to move ahead with the plan to remove NPL's from bank balance sheets and could include a private bad bank, according to Handelsblatt sources. (Handelsblatt) This comes ahead of DBRS rating Portuguese Bonds this Friday

 

FX

GBP/USD outperformed and once again jumped on no news during thin conditions ahead of the Tokyo open, which saw the pair trip through stops and prior support at the 1.2200 level to the upside. Broad-based weakness was observed in USD to the benefit of its major counterparts, with AUD/USD supported following the release of RBA minutes which suggested a neutral tone and in turn dampened some hopes of further cuts, while NZD was also underpinned following firmer than expected CPI.

RBA minutes from October 4th meeting stated that members judged holding rates at the meeting was consistent with inflation and growth targets, while members also noted Q3 CPI figures would be available at the next meeting.

RBA's Governor Lowe said Australian interest rates are already very low, while he also added they are watching employment and the stability of the financial system.

New Zealand CPI (Q3) Q/Q 0.20% vs. Exp. 0.00% (Prev. 0.40%), Y/Y 0.20% vs. Exp. 0.10% (Prev. 0.40%).

 

COMMODITIES

Oil prices recovered some of yesterday’s losses and reclaimed USD 50.00/bbl. Gold (+0.2%) gained after it found support around USD 1250/oz, with a weaker USD also underpinning the precious metal, while copper nursed yesterday’s losses alongside a broad-based recovery across commodities and improvement in risk sentiment.

Kuwait's acting oil minister said he expects producers to reach a production 'understanding' at the November OPEC meeting.

 

U.S

Fed's Vice Chair Fischer (Voter, Neutral) stated that low rates make monetary policy more difficult while they are close to their inflation and employment targets. Fischer also added that low rates make the economy more vulnerable to adverse shocks that could lead to a recession.

CBS News survey showed Hillary Clinton with 47% of support vs. 38% for Donald Trump.

 

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