Talking Points:

  • The global risk rally had another leg in Asia, but there are signs it is slowing
  • The Nikkei had a solid third say of gains, but other indexes were essentially flat
  • The US Dollar continued to gain on the Yen but was capped against the Euro

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No bad news was good news for most Asia Pacific stocks Wednesday as the global revival of risk appetite kept some markets in the green for a third straight day.

The Nikkei 225 ended up 0.45%, buoyed up by another strong US lead. But there were perhaps signs of exhaustion elsewhere. The Kospi ended down 0.02%, the ASX 200 was essentially flat and shares in Hong Kong slipped.

The Australian Dollar got a lift from robust consumer confidence numbers released by major lender Westpac. That aside it was once again the greenback’s session. The US Dollar was again up against the Japanese Yen although it made less headway against the Euro. A rise in US bond yields might have supported it had Germany’s not risen too. The UK pound remains near one-year highs against the Dollar as higher domestic inflation puts interest-rate rises back on top of investor in-trays.

Gold prices were barely moved, despite the continuing allure of riskier assets which usually sees them slide. US President Donald Trump’s urging of tougher measures against North Kore reportedly supported the oldest haven. Meanwhile crude oil prices were mixed. Reports of rising stockpiles weighed on the US benchmark whereas international Brent rose as investors speculated about higher demand later in the year.

Bitcoin took a knock as investors worried about increased regulation of sections of the cryptocurrency market and JP Morgan Chief Executuve Jamie Dimon branded the space a “fraud.” Bitcoin traded below $4,000 for the first time since August.

In terms of economic numbers, the remainder of Wednesday offers UK labor-market stats, Eurozone industrial production and US mortgage applications. Crude Oil inventory levels from the Department of Energy are coming up too.

--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter:@DavidCottleFX