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Asia Pacific Markets Talking Points

  • APAC equities trade broadly higher absent a clear catalyst, Yen fell
  • US-China trade resolution bets boost Shanghai Composite, ASX 200
  • S&P 500 facing indecision as market positioning offers bullish bias

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

Market sentiment was overall upbeat during a relatively quiet Asia Pacific session on Tuesday. Gains were seen in most bourses, with shares performing the best in China and Australia where the Shanghai Composite and ASX 200 rose over 1.8% and 1.2% respectively.

Meanwhile, absent a clear catalyst, gains in equities were not as pronounced in Japan and South Korea. The Nikkei 225 and KOSPI only rose about 0.3% heading into the close. Meanwhile, the anti-risk Japanese Yen aimed cautiously lower against its major counterparts.

The upbeat mood could have been traced to rising bets of a US-China trade deal after President Donald Trump recently found a resolution with Mexico, avoiding a rise in tariffs on that front. At the end of this month, Mr Trump is expected to make that call around the G20 Summit in Osaka.

Several newswires attributed the upbeat mood in markets to the People’s Bank of China fixing the Yuan reference rate against the US Dollar such that it was a larger-than-expected appreciation. This is despite pronounced gains in the Greenback over the past 24 hours.

China is Australia’s largest trading partner, thus fading trade tensions between the world’s largest economies can significantly improve business sentiment and offer a boost for their stock markets. S&P 500 futures are now pointing higher, hinting of more upbeat mood to come.

S&P 500 Technical Analysis

However, taking a closer look the US benchmark stock index reveals a warning sign. A Shooting Star candlestick is indicating indecision after pronounced gains and could precede a turn lower given confirmation. That places the focus on a potential support area around 2817.

To contrast this signal, IG Client Positioning is still offering a bullish-contrarian trading bias for the S&P 500. An uptick net-short positioning can accelerate near-term gains. To learn more about using this in your trading, join my webinar each week on Wednesday’s at 00:00 GMT.

S&P 500 Daily Chart

S&P 500 Outlook Mixed as Stocks Rally on US-China Trade Deal Bets

Chart Created in TradingView

FX Trading Resources

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

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