September 12, 2017 - Andria Pichidi
European Outlook: The global stock market rally continued in Asia overnight, as North Korea jitters continue to ease and risk appetite returns. Hurricane Irma seems to have caused less damage than some feared and while Irma and Harvey will leave their mark on the U.S. economy, markets once again quickly settle down. The MSCI Asia Pacific Index rose for a fourth day and the Nikkei gained 1.20% so far, with U.K. and U.S. stock futures also moving higher. The buoyant mood on equity markets will keep European yields underpinned after yesterday’s broad move higher. Yields remain at relatively low levels, and mostly clearly below the average seen over the past three month. The downtrend that has been in place since the middle of July remains intact. The local calendar today is highlighted by U.K. inflation numbers ahead of the BoE meeting on Thursday and Data this week will be highlighted by the August inflation report (Tuesday).
FX Update: The dollar carved out new rebound highs during the Asia session. USDJPY continued to lead the way as markets react to a sense of reduced risks stemming from North Korea and Hurricane Irma, with the former having refrained from further missile testing and the latter now having weakened to a tropical storm rating while tentatively proving to be less damaging than feared to the U.S. mainland. USDJPY logged a one-week high at 109.58, which is over two big figures up on Friday’s low at 107.31. EURUSD clocked a three-session low at 1.1945. The dollar has since come off from its highs, while USDCAD ebbed to a two-session lows just under 1.2100. With a good chunk of the pre-weekend risk-off positioning having been reversed, and with the likelihood of further sabre-rattling antics from North Korea as the rogue nation draws nearer to nuclear ICBM capability, we don’t recommend following the dollar rebound, especially in the case of USDJPY. Sterling markets will have UK inflation data today, where we expect the headline CPI rate to lift to 2.8% y/y from 2.6%.
New Zealand:The NZDUSD spiked up around 40 pips on the latest opinion poll results from NewsHub-Reid as reported by Reuters today morning, with an increase up to 0.7274. The National Party seems to be on the lead with 4% rise up to 47.3%, while Labour Party fell 1.6% down to 37.8%. These results seem to be against the recent increasing popularity we saw for Labour Party. The elections are due on September 23.
Canada:Stocks and yields surged as risk appetite came back into play. Canada underperformed in both markets, with the jump in the S&P/TSX only half that of Wall Street and most indexes in Europe. The rise in GoC yields also was smaller than in the U.S. though a little larger than in Europe. The loonie see-sawed but finished little change on the day. Housing starts were the only item on the calendar, and did not have any lasting impact on the market.23.
IMF’s Langarde and Chinese Premier Li Keqiangmet this morning in Beijing along with World Bank President Jim Yong Kim and other Heads of global Organizations. As Reuters reported, Chinese Premier stated earlier that “There are increased positive factors in the global economy and signs of warming-up in some aspects. But at the same time, the fragility persists and unstable and uncertain factors are still increasing,” hence he believes that Free trade can be consider as a good way for resolving any issues raised on recovery procedure and will also help Companies transform and give variety of option to consumers as well. Meanwhile he also address in his speech, the China’s economy growth, by saying that growth seen in the 1st half will be continue.Mrs Christine Lagarde on the other side mentioned that despite the fact that the global economy is recovering, it could easily be derailed by policy uncertainty and the threat of protectionism.
Main Macro Events Today
September 5, 2017 - Andria Pichidi
European Outlook: Asian stock markets traded mixed, with stocks in Tokyo and South Korea still pressured by North Korea jitters, while Hang Seng and CSI 300 managed to move higher.READ MORE
August 23, 2017 - Andria Pichidi
European Outlook: Asian stock markets moved higher, after a positive session on Wall Street amid reports of progress on Trump’s overhaul of the tax code and a solid PMI reading from Japan. The Hang Seng continues to outperform and is currently up 0.91%.READ MORE
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