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Asia Pacific Markets Wrap Talking Points

  • US-China relationship worries sap Asia stocks follow-through on Wall Street gains
  • ASX 200 climbs as lackluster Australian jobs report fuels RBA rate cut expectations
  • S&P 500 futures aiming towards support after retesting falling trend line resistance

Find out what retail traders’ equities buy and sell decisions say about the coming price trend!

Key Asia Market Developments

Asia Pacific equities traded mixed on Thursday, failing to fully capitalize on a rosy Wall Street session beforehand. As anticipated, US President Donald Trump’s move to restrict telecommunication-based businesses access to the US on national security grounds fueled simmering tensions between the world’s largest economies amidst trade talks. Notable targets of this executive order are Huawei and ZTE corp.

The KOSPI was one of the worst-performing benchmark indexes, sinking about 0.90 percent. In Japan, the Nikkei 225 traded over 0.6 percent to the downside, weighed down by Tokyo Electron Ltd (a semiconductor manufacturer). Things looked cautiously better in China where the Shanghai Composite was heading about 0.25 percent to the upside.

In Australia, a lackluster employment report, while sinking AUD/USD closer towards 2015 lows, boosted the ASX 200. This is because increased RBA rate cut bets generally work in favor for domestic equities, given that lower benchmark lending rates are a tool to help stimulate economic activity. The nervousness in markets translated into cautious gains for the anti-risk Japanese Yen.

The Remaining 24 Hours

All things considered, S&P 500 futures are now pointing lower as the European trading session approaches. The economic calendar is looking relatively light looking at the remaining 24 hours, thus placing the emphasis on risk trends and their impact on both stocks and currencies. The spark in optimism on the US delaying auto tariffs for six months seems to have faded as the focus turns to US-China trade updates.

S&P 500 Technical Analysis

Looking at futures to show after-hours trade, the S&P 500 seems to be aiming lower following a test of the near-term falling resistance line from the beginning of this month. The downtrend that it has been following was initiated by a Bearish Engulfing candlestick. With that in mind, support may be tested next at 2824. Keep a close eye on S&P 500 trader positioning which looks vulnerable to an uptick in net-long trades.

Want to learn more about how sentiment readings may drive the S&P 500 and various other equities? Tune in each week for live sessions as I cover how sentiment can be used to identify prevailing market trends!

S&P 500 Futures Daily Chart

S&P 500 Trend Eyes Support, US Auto Tariff Delay Cheer Fades in Asia

Chart Created in TradingView

FX Trading Resources

--- Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter