Market News & Analysis
Market Brief: Kiwi Dollar Takes Top Spot In Early Trade
View our guide on how to interpret the FX Dashboard
- China’s manufacturing PMI’s provided a positive start to the week for risk appetite, with IHM Markit read expanding at its fastest rate in nearly 3 years. This follows on from NBS (government related) read on Saturday which expanded for the first time in 7 months.
- Earlier it was reported that China wants tariffs rolled back as part of a phase one trade deal.
- Over the weekend, PBOC’s Governor Yi warned that policy is to remain cautious and that the ‘downturn will stay for a long time’.
- New Zealand’s government announced it plans to increase infrastructure spending on Saturday, a move which should help boost growth into 2020.
- It was a mixed set of data from Australia. ANZ job advertisements fell -1.7% in November, showing less demand from employers and the potential for weaker employment number further out. Building approvals also declined -15.6% YoY, its fastest decline since March 2009. Manufacturing PMI expanded at 51.6 versus 48.1 prior to show the sector back into expansion.
- NZD and AUD are the strongest majors on the back of firmer PMI data from China. JPY is the weakest in a mild risk-on session. Daily ranges for NZD crosses hit 80-95% of their ATR’s whilst pairs outside of NZD are just 35-50% of their ATR’s (so an increased chance of them breaking out of consolidation in the next session/s.)
- DXY printed a bearish key reversal on Friday (bearish outside bar and hammer) to suggest a top is being carved out.
- EUR/USD is back above 1.10 having printed a bullish hammer on Friday. A break above 1.1028 confirms the reversal candle.
- NZD/CAD continues to hold above 0.8500 support and could be heading towards a break to new highs.
- Key Asian stock indices are showing cautious modest gains so far on the backdrop of a better than expected manufacturing activities in China that has reinforced that the global economy has started to recover. Official NBS China Manufacturing PMI for Nov has came in at 50.2 over the weekend, the first expansionary reading above the 50 level since Apr 2019 coupled with the non-official Caixin Manufacturing PMI that comprises of more small medium enterprises that has also beat consensus forecast to rise to a near 3-year high of 51.8 in Nov; the 3rd consecutive month of steady increases above the 50 level since Aug 2019.
- On U.S-China trade deal related matters, there was a report out from China’s Global Times on Sunday that had cited from unnamed sources that in order for the much touted “Phase One trade deal” to be signed off, China’s stance was a removal of existing tariffs on Chinese goods but U.S. officials had been resisting such demand because the tariffs were their only weapon in the trade war. Time is now running short for a Phase One deal to be agreed between U.S and China before another tranche of U.S tariffs are set to be implemented on Chinese products on 15 Dec.
- After a calm weekend in the previous week, Hong Kong’s anti-government mass demonstrations were back in the street over the weekend where the police clashed with protesters with tear gases fired. There are no signs of demonstrations abating as anti-government protestors have planned a series of lunchtime rallies for the whole of this week.
- Hong Kong Financial Secretary Paul China has warned that Hong Kong is expected to record its first budget deficit since 2004 with the economy sustaining damage to 2% of GDP growth the due to the on-going 6-months of social unrest.
- Hong Kong’s Retail Sales for Oct out later at 0830 GMT where its has recorded a decline of -18.3% y/y in Sep.
Matt Simpson and Kelvin Wong both contributed to this articleData 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.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital 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), GAIN Capital Singapore 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 GAIN Capital Singapore 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 GAIN Capital Singapore 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.
GAIN Capital Singapore 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 cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.