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Asian Stocks Make Cautious Gains Despite Trade, Brexit Worries

Asian Stocks Make Cautious Gains Despite Trade, Brexit Worries

David Cottle, Analyst


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Asian Stocks Talking Points:

  • Equities were mostly higher if not by very much
  • The trade spat between China and the US showed no sign of ameliorating
  • The US Dollar weakned a little too as doubts grew about the likely pace of rate hikes ahead

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

Most Asian stocks were cautiously higher as a new week got under way Monday despite the broad backdrop remaining rather threatening.

Differences on trade between the US and China were highlighted again at the Asia Pacific Economic Cooperation summit in Papua New Guinea. US Vice President Mike Pence listed his country’s differences with China, shortly after criticizing China’s flagship Belt and Road program. China’s foreign minister responded by denying that the plan would force participating countries into a debt trap.

Away from trade, Europe’s pressing problems continue to simmer. UK Prime Minister Theresa May’s Brexit deal seems highly unlikely to pass Parliament, while Italy’s budget standoff with the European Union endures. Still, Japanese data showed exports retrace their September fall by rising a annualized 8.2%. That seemed to boost the bellwether Nikkei 225, even though it was still below the 9% rise expected.

The US Dollar was broadly lower, if not by very much, following caution over the global growth outlook expressed by Federal Reserve officials. USD/JPY has slid once again back towards its key, long-term daily-chart uptrend line.

Uptrend holds on, just. US Dollar Vs Japanese Yen, Daily Chart.

There still seem very few fundamental reasons to prefer the Yen, especially when interest-rate differentials are taken into account, but, for the moment it seems to be winning this particular ‘battle of the havens.’

Gold prices got a small lift even as the Dollar retreated while crude oil prices were supported by expectations of further production cuts.

Still to come this Monday is the housing market index from the US National Association of Home Builders.

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.