Friday 11th January: Powell’s comments bring Asia to the green

Global Markets:

• Asian Stock Markets : Nikkei up 0.97%, Shanghai Composite up 0.64%, Hang Seng up 0.52%, ASX down 0.36%
• Commodities : Gold at $1293.95 (+0.51%), Silver at $15.76 (+0.76%), Brent Oil at $61.53 (-0.24%), WTI Oil at $52.56 (-0.06%)
• Rates : US 10-year yield at 2.724, UK 10-year yield at 1.280, Germany 10-year yield at 0.199

News & Data:

• (AUD) Retail Sales m/m 0.40% vs 0.30% expected
• (NZD) Building Consents m/m -2.00% vs 1.40% previous
• (AUD) AIG Construction Index 42.6 vs 44.5 previous
• (USD) Natural Gas Storage -91B vs -62B expected
• (USD) Unemployment Claims 216K vs 226K expected
• (CAD) NHPI m/m 0.00% vs 0.00% expected
• (CAD) Building Permits m/m 2.60% vs -0.50% expected

Markets Update:

Asian stock markets are mostly higher on Friday with modest gains after U.S. stocks rose overnight for the fifth straight session amid optimism that the U.S. and China will eventually reach a long-term trade deal. Comments by the Federal Reserve Chairman Jerome Powell that the U.S. central bank would be patient about raising interest rates also boosted sentiment.

The Japanese market is advancing, tracking a weaker yen as well as the overnight gains on Wall Street. Nikkei 225 rose 1 percent in afternoon trade while the Topix index gained around 0.5 percent.

The mainland Chinese markets, watched in relation to the ongoing trade war between Beijing and Washington, were cautious by the end of the morning session. However, they were seen to be gaining later in the day with the Shanghai composite as well as the Shenzhen component indices up by 0.6%. South Korea’s Kospi also rose more than 0.6 percent. Australia’s ASX 200, however, slipped into negative territory as it traded down by 0.4 percent.

The dollar index, measuring it against major peers, dipped 0.1 percent to 95.38. The euro firmed 0.2 percent to $1.1523, while the dollar dipped 0.1 percent to 108.28 yen. The yuan, both onshore and offshore, climbed to the highest levels since late July, aided by a weaker dollar and rising hopes of progress in the U.S.-China talks.

U.S. Treasury debt prices erased early gains after a soft 30-year bond auction and in reaction to Powell’s comments on the Fed “substantially” reducing the size of its balance sheet. Crude prices held near one-month highs, but a more than week-long in oil rally slowed as optimism surrounding U.S.-China trade talks faded a little.

Upcoming Events:

• 10:30 AM GMT – (GBP) GDP m/m
• 10:30 AM GMT – (GBP) Manufacturing Production m/m
• 02:30 PM GMT – (USD) CPI m/m
• 02:30 PM GMT – (USD) Core CPI m/m
• &more…