Asian Stocks Gain On Italian Political Hopes, Trade Worries Linger
ASIAN STOCKS TALKING POINTS:
- Asian stocks made broad gains Thursday
- Worries about political turmoil in Italy abated a little but remain front and centre
- The Euro got a little respite too
Asian stocks made broad gains Thursday, reportedly on the moderate receding of political turmoil in Italy.
The country’s two largest political parties may take another stab at forming a government. A first attempt failed earlier this week when their proposed finance minister was deemed unacceptable by the Italian Presidency. A well-received auction of Italian debt also helped soothe nerves Wednesday but, all the same, the single currency is likely to face further headwinds from the country.
Still, risk appetite certainly saw some revival on the month’s last day, with the Nikkei 225 up 0.8% and all other regional indexes in the green. Shanghai stood out as the leader with gains of more than 1 %. This was quite impressive given a report from The Wall Street Journal which saw daylight earlier in Thursday’s session saying that the US plans tariffs on European steel and aluminum.
The Euro gained a little against the US Dollar, rising from ten-month lows. The Australian Dollar got a modest hit from Chinese data, which showed the important steel sector losing steam even as manufacturing more broadly held up better than expected. The Canadian Dollar made more gains after the Bank of Canada Wednesday left the door to higher rates perhaps in the near future wide open.
That said USD/CAD remains in the uptrend which has dominated trade since mid-April, although the US Dollar does seem in for a test of the channel downside unless the bulls can take control soon.
Still to come on Thursday are Eurozone unemployment figures, Canada’s official Gross Domestic Product release and, probably most importantly, US personal income and spending data.
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--- Written by David Cottle, DailyFX Research
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