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Market Brief: Asian Stocks, Commodity Currencies In The Green

Nikkei 225

After days of being in the red, Asian equity markets were finally able to trade in the green this morning. The Hang Seng Index is up close to 50 points from yesterday, trading at around 26,373.9. Meanwhile, the Nikkei is up 0.70% at 23,303.3.

The Canadian dollar had the most gains against the US dollar among the major currencies. As of this writing, it is up 0.14% from its open price with USDCAD trading at 1.3228. AUDUSD has also recouped some of its losses from yesterday as it bounced back to trade around the 0.6700 handle in the Asian session. Meanwhile, USDJPY is also up 16-pips at 108.57.

Poloz’ Speech

BOC Governor Stephen Poloz helped the Canadian dollar start the day strong. In his speech earlier this morning, he said that wage growth in Canada remains to be resilient.

No News Is Good News

Risk aversion seems to have eased in today’s early morning session. There has been no new updates on the US-China trade deal negotiations except for comments from White House chief economic adviser Larry Kudlow saying that they are “getting close” to a trade deal. Investors may have used this as an opportunity to bargain hunt Asian stocks.

PBOC Injects Liquidity

News that the PBoC (People’s Bank of China) pumped around 200 billion yuan into the economy in an effort to stimulate growth might have also eased market jitters. Remember that yesterday data from China showed signs of a potential slowdown. This move from the central bank could have allowed investors to breathe a sigh of relief, knowing that growth in the world’s second largest economy is being supported by looser monetary conditions locally.

US Data Scheduled Today

For today, US consumer spending reports are on deck. At 1:30 pm GMT, the headline retail sales report for October is estimated to show a 0.1% uptick. Meanwhile, excluding big ticket purchases, the core retail sales report is eyed to come in at 0.3%. Positive figures will likely be bullish for the US dollar. These would mean that the Fed’s optimism on their labor market has translated to more economic activity through spending.

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USDSGD Outlook

Remember the bullish set up I pointed out on USDSGD four days ago? Well, it still looks valid. The currency pair seems to have pulled back to the neckline of the double bottom. The area around the 1.3600 psychological handle also coincides nicely with the 38.2% Fib level from the low of November 7 to the swing high of November 13. It’s also finding some support at the 100 SMA on the 4-hour time frame.

If the bulls are strong enough, we could see USDSGD trade its way above the 1.3700 psychological handle and test its September 13 low at 1.3723. On the other hand, a strong bearish close below the 100 SMA could mean that the currency pair may drop to its October lows around 1.3555.Download our latest quarterly market outlook for our longer-term trade ideas.

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