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Asian Stocks Wilt Across Board, US Midterms, Central Banks Eyed

Asian Stocks Wilt Across Board, US Midterms, Central Banks Eyed

David Cottle, Analyst


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Asian Stocks Talking Points:

Find out what retail foreign exchange investors make of your favorite currency’s chances right now at the DailyFX Sentiment Page

Asian stocks were broadly lower Monday despite some late vigor from Wall Street last week, Investor worries about weaker global growth and the effects of higher US interest rates seemed to be in charge.

Chinese President Xi Jinping tried to position China as a globalization’s standard bearer in a speech kicking off China’s International Import Expo. This event will put the spotlight on China’s propensity to consumer global goods, when so often its vast export machine grabs attention.

Still, the prospect of trade conflict between the world’s two largest national economies still glowers over markets.

Sure enough, the Nikkei 225 shed 1.2% in the middle of the Tokyo afternoon, with the ASX 200 off 0.2% and the Kospi down 1.5%. Chinese stocks initially held up better but they rolled over as their morning ended. The Shanghai was down 1.5% and the Hang Seng lost 2.4%..

Focus is also of course on the US Midterm Elections which will be held on Tuesday. They will be voters’ first chance to pass real verdict on Donald Trump’s Presidency and, despite a strong economic performance, polls suggests that the Democrats could do well. The week will also bring three major central bank monetary policy decisions, from the US, Australia and New Zealand.

Currency markets were generally subdued, with the US Dollar inching lower against most major traded rivals. The UK Pound picked up a bit of steam on reports that a Brexit customs union deal might be close, but it remains far from certain that any arrangement denying the UK the right to make its own trade deals would pass the House of Commons in London.

The Japanese Yen is still struggling against the US Dollar, with USD/JPY’s uptrend channel from late October still intact. Bank of Japan Governor Haruhiko Kuroda said monetary largesse will continue until inflation sustainably tops 2%, further highlighting the policy gap between the BoJ and the Federal Reserve.

Uptrend Holds On: US Dollar Vs Japanese Yen, Daily Chart

US Dollar bulls are maintaining the fight and still have this year’s peak in their sights.

Gold prices were steady, while crude oil prices edged down. They were reportedly undermined by last week’s news that the US will apply various wavers to its sanctions against Iran.

Still awaiting investors on Monday are data on US personal consumption and expenditure which will see daylight after official US public borrowing figures.

Resources for Traders

Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

--- Written by David Cottle, DailyFX Research

Follow David on Twitter @DavidCottleFX or use the Comments section below to get in touch!

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.