Asian Stocks Mixed As Trade Drags. Firmer Oil Boosts Energy Names
ASIAN STOCKS TALKING POINTS:
- Asian stocks were mixed thanks to trade worries and oil price gains
- New Zealand exports were revealed to have put in a strong performance
- Chinese May industrial profits just failed to match the previous month’s vigor
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Asian stocks were mixed once again on Wednesday with trade worries still crimping risk appetite. Energy stocks still managed to advance, however, as oil prices gained.
Crude supply faced disruptions in both Canada and Libya while the US administration said that all countries dealing with it should stop imports of Iranian oil by November to comply with sanctions.
The Nikkei 225 was down 0.3% in the middle of the Tokyo afternoon, with mainboards in Shanghai, Hong Kong and Seoul lower by broadly similar amounts. Australia’s ASX 200 bucked the trend, lying in the green but only by a whisker.
There was very little movement in currency markets. The US Dollar inched up from two-week lows, but slipped back a little against the Japanese Yen in rather listless trading. The Australian Dollar took a little knock following May data which showed Chinese corporate profits holding up, but slowing from the previous month.
Meanwhile its New Zealand cousin got a boost from strong domestic export data, but was held back by yet another very weak business confidence reading. The Reserve Bank of New Zealand will announce its June monetary policy decision on Thursday. No change is expected to the record-low, 1.75% Official Cash Rate but it looks as though any accompanying statement will now be on the dovish side, which may weigh further on the currency.
NZD/USD remains in the downtrend dominant since mid-May on its daily chart, a milder continuation of the sharper falls seen since April. Suspicions that the RBNZ won’t offer bulls much comfort have seen it test recent support, although it remains above those levels as Wednesday’s Asian trade winds down.
Gold prices slipped a little through the session.
Still to come on the data schedule are US durable goods orders, its trade balance and also mortgage application levels. Central Bank watchers can look to London where Bank of England Governor Mark Carney will be talking about the latest Financial Stability Report.
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--- Written by David Cottle, DailyFX Research
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.