There were no fresh catalysts to move the markets today, so Asian session traders focused on pricing in themes from the previous sessions.
- IMF: balance of risks to Australia’s economy are “tilted to the downside”
- Japan’s Finance Minister Aso formally orders supplementary budget
- RBA’s meeting minutes: “no strong case” for near-term policy adjustment
RBA’s meeting minutes
Earlier today the Reserve Bank of Australia (RBA) printed its meeting minutes for the month of November.
The doc didn’t really reveal anything new, as it only reinforced the quarterly release which reflected higher growth and labor market expectations.
What traders paid closer attention to is the fact that members still believe that
“[T]he next move in the cash rate was more likely to be an increase than a decrease, but that there was no strong case for a near-term adjustment in monetary policy.”
Nothing really new for the RBA, but it did give the bears an excuse to extend the Aussie’s selloff from earlier this week.
Overall risk aversion
The Asian bourses took cues from their U.S. counterparts and extended their bearish trading environment.
If you recall, a drop in Apple’s shares weighed on the tech sector in the U.S. It also didn’t help that a financial misconduct in Nissan had also dragged on Nikkei’s prices.
Mixed messages from Trump and Mike Pence regarding U.S.’ tariffs on China’s products raised uncertainty over the U.S.-China trade war.
Add that to concerns over peaking corporate earnings, higher borrowing rates, and a slowdown in global economic growth and you’ve got yourself a perfect cocktail for the bears.
- Nikkei is down by 1.14% to 21,571.6
- A SX 200 is down by 0.33% to 5,658.2
- Shanghai index is down by 1.63% to 2,659.371
- Hang Seng is down by 1.83% to 25,890.3
Commodities were also in the bears’ bandwagon and traded lower despite some dollar weakness and prospects of OPEC-led supply cut ahead of today’s Joint Ministerial Monitoring Committee (JMMC) meetings.
- Gold is down by 0.19% to $1,221.59 per troy ounce
- Brent crude oil is down by 0.66% to $66.47 per barrel
- U.S. WTI is down by 0.56% to $57.03 per barrel
Major Market Mover(s):
Risk aversion, the IMF’s warnings about Australia’s risks being “tilted to the downside,” and the RBA not seeing a reason for a rate hike anytime soon gave the bears an excuse to attack the Aussie.
AUD/JPY is down by 5 pips (-0.06%) to 82.04; AUD/CHF is down by 12 pips (-0.16%) to .7234; AUD/CAD is down by 10 pips (-0.10%) to .9595; AUD/NZD is down by 28 pips (-0.26%) to 1.0637; EUR/AUD is up by 15 pips (+0.10%) to 1.5714, and GBP/AUD is up by 36 pips (+0.20%) to 1.7642.
There were no direct catalysts to boost the Kiwi higher, but the Aussie’s recent weakness and a bit of profit-taking from last week’s moves might have weighed on the comdoll.
NZD/USD is up by 14 pips (+0.21%) to .6852; NZD/JPY is up by 19 pips (+0.25%) to 77.12; NZD/CHF is up by 9 pips (+0.13%) to .6801; GBP/NZD is down by 17 pips (-0.09%) to 1.8765, and EUR/NZD is down by 33 pips (-0.20%) to 1.6715.
European currencies snuck in pips against the yen today. No direct catalyst for the move, but traders might be anticipating volatility during the London session.
EUR/JPY is up by 4 pips (+0.04%) to 128.94; GBP/JPY is up by 20 pips (+0.13%) to 144.75, and CHF/JPY is up by 15 pips (+0.14%) to 113.43.
Watch Out For:
- 7:00 am GMT: Switzerland’s trade balance (2.89B CHF expected, 2.43B CHF previous)
- 7:00 am GMT: Germany’s PPI (0.3% expected, 0.5% previous)
- 8:20 am GMT: RBA Governor Philip Lowe to give a speech in Melbourne
- 10:00 am GMT: BOE’s MPC inflation report hearings