Asian Stocks Slide Again, Weak Wage Data Force AUD Lower
- Asian markets fell across the board
- US tax reform is seen as likely to be a longer time coming, oil prices were also lower
- The Australian Dollar was whacked by weak data, especially against the Japanese Yen
More cautious sentiment endured in Asian stock markets, with energy names under particular duress as oil prices slipped back. A lower close for US equity did some all-too predictable damage. Investors Stateside worried anew about the likely pace of tax reform.
The Nikkei 225 ended down 1.57% with all other regional bourses in the red, if to a lesser extent.
The Japanese Yen firmed, as it often does when risk aversion is high. The Australian Dollar took a big knock against it and the greenback on news of anaemic domestic wage growth. The Reserve Bank of Australia is particularly worried about pay levels and their weakness is thought to be one major reason why Australian interest rates remain stuck at record lows. Japan registered a seventh straight quarter of economic growth but some gloss was lost to the fact that it still missed forecasts.
Gold prices were steady while crude oil took a hit, reportedly on International Energy Agency doubts over global demand. Reports of a military takeover in Zimbabwe largely passed Asian markets by. Media agencies report that the army has control of the government and is claiming to be targeting “criminals” around long-serving President Robert Mugabe, rather than Mugabe himself.
The remaining Wednesday data highlight will be the US Consumer Price Index for October, along with retail-sales figures. Warm-up acts for this headliner will include UK employment stats, Canadian home sales and US mortgage-application numbers. The US Department of Energy will release oil inventory information. There are plentiful central bank speakers at the European Central Bank’s Frankfurt get-together but no Presidents are on Wednesday’s slate.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter:@DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.