Market Brief Asia Marketes Look Past Trumps Demands For Lower Rates

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FX Brief:

• Trump “protested fact” that US rate are too high and that US rates should be lower than all of their competitors. Markets took little notice though, probably because its not his first and unlikely to be his last stab at the Fed chair.
• The Australian dollar was lower after dovish RBA minutes revealed that “a case could be made to ease monetary policy at this [November] meeting”, despite holding rates and opting to wait for more data to see how well the economy had responded to prior cuts.
• Huawei has been granted a 90-day license extension by the US, allowing them to deal with US companies.
• New Zealand produce prices rose 1% in Q3, up from 0.5% in Q2. With NZ’s TWI trading at a discount to RBNZ’s forecast and no chances of another cut until February, we continue to see a case for positive data supporting NZD against its dominant, bearish trend.
• BOJ’s Kuroda said that, whilst they have no plans to issue a digital currency now, they’re researching the topic in case the need for one heightens in future. Just Like RBA and RBNZ who are ‘researching’ negative rates and QE, despite not intending to….
• AUD and NZD are the weakest majors, JPY and EUR are the strongest. Volatility remained contained overall, although AUD/USD’s daily range has hit 71% of its 10-day ATR following the minutes and AUD/JPY saw an intraday low of -0.59%. No pairs have exceeded their ATR’s so far this session.

Equity Brief:

• Asian stock markets are trading in a mix fashion as at today’s Asian mid- session where Hong Kong’s Hang Seng Index (HSI) and Australia’s ASX 200 are up by 1.00% and 0.70% respectively. The HSI is on track on for its 2nd consecutive session of positive performance despite the on-going unrest where the Hong Kong Polytechnic University stand-off has extended into a third day today (Tues) where around 200 protesters are still trapped in the campus, raising fears of bloody clashes. The gainers in HSI are led by health care and technology related stocks where CSPC Pharmaceutical and AAC Technologies Holdings, a supplier for Apple components have rallied by around 4% respectively.
• Alibaba will stop taking orders from institutional investors for its $13.4 billion secondary listing in Hong Kong earlier than expected due to strong demand according to sources as per reported by Reuters. Alibaba’s stock is expected to start trading on Hong Kong Stock Exchange on 26 Nov.
• U.S-China trade related news flow are alternating between positive and negative. In yesterday’s U.S. session, CNBC had reported that the mood in Beijing was pessimistic about the prospects of sealing a deal before 2019 ends. On the other hand, U.S. administration has granted a new 90-day license extension for U.S firms to do business with China giant technology firm, Huawei.
• Japan’s Nikkei 225 has shed by -0.41% dragged down by a stronger JPY where it has continued to gain by around 0.10% against the USD in today’s Asian session after an overnight failure break above the 109.00 psychological level on the USD/JPY.
• Singapore’s Straits Times Index (STI) is the worst performer so far where it has declined by around -0.70%.  A 4% drop in the conglomerate Jardine Matheson Holdings coupled with property developer City Developments that has shed by -1.44% are the main culprits.
• Meanwhile, U.S. President Trump has tweeted his displeasure on the current Fed’s monetary policy stance after the meeting between him and Fed Chair Powell in person that took place yesterday. Trump stated that U.S. interest rate is set too high relative to other countries and a strong USD is hurting manufacturing activities and growth So far, muted market reaction.   

Matt Simpson and Kelvin Wong both contributed to this article