Asia Pacific Stocks Mixed As Wary Investors Eye US Bond Yields
Asian Stocks Talking Points:
- Local markets rather drifted through the last session of the week
- Narrow, mixed trading was the day’s order
- The US yield curve remains in charge of sentiment
Find out what retail foreign exchange investors make of your favorite currency’s chances right now at the DailyFX Sentiment Page
Asia Pacific stocks put in a mixed and rather scrappy performance to end the week as investors mulled what a further slide in US Treasury yields might be telling them about economic prospects ahead. ‘Nothing good’ appears to be the consensus.
30-year yields hit record lows Thursday with ten-years marking three-year nadir. These falls came after an inversion of the 2-10-year yield spread, a phenomenon believed by many to be a reliable recession indicator.
The usual worries about risk aversion, slowing regional economies and US-China trade ties also hover over the market but there was no obvious news to intensify any of them through the session. Markets are also looking ahead to what promises to be a fascinating central bankers’ symposium under the auspices of the Kansas City Federal Reserve at Jackson Hole next week. The meet comes amid extraordinary levels of global uncertainty and a clear breakdown in much economic data.
Still, many markets managed gains. Hong Kong’s Hang Seng was up 0.5%, with insurer Ping Ah well bid after its best results for more than ten years. South Korea’s Kospi slipped on its return from a holiday break, with majors LG Chem and SK Hynix both losing ground.
The ASX 200 was down, just, as its own daily close approached. Australia and New Zealand Bank Group stocks were down on the release of a provision update while Cochlear was higher after the hearing company produced some strong results.
The Nikkei 225 was hanging on in the green, just, up 0.1% in the middle of the Tokyo afternoon.
Foreign exchange markets were relaxed, with the US Dollar slipping back just fractionally from earlier modest gains against its major traded rivals. The British Pound managed some early gains as retail sales and consumer price data suggested that its home economy remained relatively resilient to Brexit storms.
Sterling bulls remain an endangered species however, with current GBPUS range trade still well within the pair’s long-dominant downtrend. With opposition to a no-deal Brexit apparently hardening on the opposition benches in Parliament, the currency looks likely to remain friendless for some time.
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--- Written by David Cottle, DailyFX Research
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.