Market Brief Kudlow pumps equities ahead of the weekend

View our guide on how to interpret the FX Dashboard

FX Brief:

Trade optimism made a return at the end of the week in Asia, after White House economic advisor Larry Kudlow said that US and China were close to a trade deal. (Getting that familiar feeling of déjà vu yet again…). Well, believe it or not, equities liked it and we saw carry trades come back into fashion.
BOC’s Poloz said that wage inflation is now above 4% in most measures. Meanwhile RBNZ’s governor Orr reiterated their stance that rates need to remain low for a long time, adding that future policy guidance is important. Assistant governor Hawkesby says that their next meeting in February is ‘live’.
Commodity currencies (CAD, AUD and NZD) are the strongest majors of the session, JPY and CHF are the weakest. This places carry trades at the top of the leader board for the session, with CAD/JPY, AUD/JPY and NZD/JPY leading the pack. At the other end, GBP/CAD and USD/CAD are the weakest pairs.
No pairs have met or exceeded their ATR’s today, which leaves potential for moves in the European or US sessions without imminent concerns of over extension.

Equity Brief:

Key Asian stock markets have started to trade higher as at today’s Asian mid-session with hopes (again) that the U.S-China “Phase One trade deal” sign-off will gain traction soon. White House economic adviser Larry Kudlow has told media after an event at the Council on Foreign Relations that the Phase One deal is downed to the “short strokes”.
Th best performers so far, South Korea’s Kospi 200, Australia’s ASX 200 and Japan’s Nikkei 225 which have rallied by close to 0.70% to 1.00%.
The ASX 200 is now eying a 2nd consecutive session of gains led by gold mining related stocks; Dacian Gold and Saracen Mineral which have rallied by 5.1% and 2.7% respectively.
Cautious trading in Hong Kong stock market as the Hang Send Index has only posted a modest gain of 0.30% where participants are more concerned on the economic fallout from the escalation of the on-going anti-government demonstrations over the coming weekend.
Singapore’s Strait Times Index (STI) has not jumped onto the trade deal (hope) bandwagon as it is almost trading almost unchanged; dragged down by Singtel which has recorded a decline of -3.30% after it posted a S$668 million loss on provision due to its Indian associate, Bharti Airtel’s claims from the Indian government where the Supreme Court in India has ordered telecom operators to pay the state billions in past dues.
The S&P 500 E-Mini futures has rallied in Asia session with a gain of 0.34% to print a current intraday high of 3110 (fresh all-time high) after Kudlow’s positive comments on the U.S.-China Phase One trade deal.

Up Next

US retail sales contracted by -0.3% in September, its first negative print since February. Another negative print today could point towards concerns that weakness from the manufacturing sector is spreading to the wider economy. Keep an eye on USD to see if it retraces further, in line with what price action currently suggests.

Matt Simpson and Kelvin Wong both contributed to this article Data from Refinitiv. Index names may not reflect tradable instruments and not all markets are available in all regions.

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.