There were no new catalysts to price in during the Asian trading session, so market players mostly took cues from their U.S. counterparts.
- Japan’s BSI manufacturing index up from -3.2 to 6.5 vs. 8.0 expected
- AU Westpac consumer sentiment dips by 3.0% vs. 2.3% decrease in August
- U.S. and Japan to conduct second round of trade talks next week?
Overall risk aversion
With not a lot of market-moving data or catalysts available, Asian session traders ended up extending themes from the previous trading sessions.
One notable move came from MSCI’s broadest index of Asia-Pacific shares outside Japan, which saw a 0.3% decline that dragged it to its lowest levels since July 2017.
We don’t have to look far for answers. China requesting the WTO to sanction the U.S. to the tune of $7 billion a year over a violation of its anti-dumping duties only serves to fuel the ongoing U.S.-China trade war.
Of course, it also doesn’t help that Donald Trump reinforced his tough stance on China yesterday.
- Nikkei is down by 0.39% to 22,575.3
- A SX 200 is up by 0.16% to 6,175.9
- Shanghai index is down by 0.33% to 2,655.892
- Hang Seng is down by 0.40% to 26,317.9
Commodity prices also felt the sting of risk aversion, with gold taking a backseat to dollar demand while crude oil benchmarks took a breather from their post-API report rallies.
- Gold is down by 0.39% to $1,193.70 per troy ounce
- Brent crude oil is down by 0.15% to $79.34 per barrel
- U.S. WTI is down by 0.06% to $69.84 per barrel
Major Market Mover(s):
Not surprisingly, the high-yielding Aussie took heavy hits across the board as traders became more concerned about the U.S.-China trade war.
AUD/USD is down by 19 pips (-0.26%) to .7098; AUD/JPY is down by 28 pips (-0.35%) to 79.14; AUD/CAD is down by 24 pips (-0.26%) to .9274; EUR/AUD is up by 30 pips (+0.18%) to 1.6325, and GBP/AUD is up by 30 pips (+0.16%) to 1.8326.
There were no fresh headlines from Japan, so the yen’s safe-haven status is likely the reason why the currency shot up against its major counterparts.
USD/JPY is down by 13 pips (-0.12%) to 111.50; EUR/JPY is down by 35 pips (-0.27%) to 128.29; GBP/JPY is down by 39 pips (-0.27%) to 145.03, and CHF/JPY is down by 34 pips (-0.30%) to 114.45.
The Loonie shrugged off a pullback in crude oil benchmarks and extended its gains from the previous session after Canada showed signs of flexibility to the U.S.’ NAFTA demands.
EUR/CAD is down by 21 pips (-0.14%) to 1.5141; GBP/CAD is down by 27 pips (-0.16%) to 1.6996; CAD/CHF is up by 15 pips (+0.20%) to .7455, and NZD/CAD is down by 19 pips (-0.23%) to .8505.
Watch Out For:
- 8:00 am GMT: Italy’s industrial production (-0.4% expected, 0.5% previous)
- 9:00 am GMT: Euro Zone’s industrial production (-0.5% expected, -0.7% previous)