Asian Stocks Talking Points:
- Most indexes posted gains
- US equities helped, as did renewed hopes that a US/China trade settlement is at least possible
- The Dollar wilted as risk appetite gained
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Most Asian stock markets managed gains on Friday as investors dared to hope that there could be some good news on trade as November proceeds. Wall Street has also logged impressive gains this week, providing a conducive backdrop for equity elsewhere.
There is a very long way to go in the trade story, of course, given the scale of dispute between the US and many countries that run persistent trade surpluses with it, notably China. However, US President Donald Trump alluded to what he called a 'very good conversation' with his Chinese counterpart Xi Jinping on the subject in a Thursday Tweet, and hopes seem to have picked up for their meeting at the Group of 20 leading economies’ summit in Argentine later this month.
Sure enough, the Nikkei 225 added 0.6%, the Hang Seng was up by 2.4% and Shanghai added 1.2%. The Kospi also gained with the ASX 200 in Sydney the most notable regional loser. It shed 0.5% as local energy and financial stocks wilted. The Australian benchmark has made up some ground back toward the psychologically crucial 6,000 area which was abandoned in early October.
However, the most recent rally is showing clear signs of exhaustion and the index looks to be headed down again, with the year’s lows uncomfortably close for the bulls.
Foreign exchange trade saw the US Dollar looking a little more defensive than it has of late, retreating from 16-month peaks against its most widely traded peers as a return of confidence tempted investors into riskier units.
Crude oil prices were lower as investors fretted rising overall output, but sanctions against major producer Iran continue to limit gains. Gold prices were lower as the Dollar gained.
The most prominent remaining feature on Friday’s data schedule is of course the official US labor market release. October’s non-farm payrolls are expected to rise by 193,000, which would be a lot better than September’s lackluster 134,000 rise. Canada’s jobless numbers are coming up too, as are various Purchasing Managers Indexes from around Europe. Swiss retail sales figures are coming up too.
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--- Written by David Cottle, DailyFX Research
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