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Risk-taking was the name of the game during the session, as traders shrug off last week’s gloomy vibes in favor of optimism over major market themes.

  • New Zealand’s retail sales steady in Q3 vs. 1.0% growth expected, 1.1% previous
  • New Zealand’s core retail sales up by 0.4% vs. 1.5% expected, 1.3% previous
  • Japan’s flash manufacturing PMI slips from 52.9 to 51.8 in November

Major Events/Reports:

New Zealand’s retail sales

Data printed earlier today showed no growth for New Zealand’s retail sales in the three months to September. Remember that analysts had expected a 1.0% growth after seeing a 1.1% uptick in Q2 2018.

The core reading didn’t fare much better, showing only a 0.4% gain when market geeks had seen a 1.5% increase after Q2’s 1.3% growth.

On an annualized basis, sales grew 2.7% following a 3.1% increase in Q2 2018.

Details show that department store sales had the largest increase (7.4%) while fuel trade popped up by 0.5% after slipping in the last three quarters.

On the other hand, sales slowed down for hardware, building, and garden supplies as well as food and beverage supplies.

Japan’s manufacturing PMI

A quick gauge of Japan’s manufacturing industry revealed that the sector had slowed down in November.

Japan’s manufacturing PMI fell from 52.9 to 51.8, which places the index reading at its lowest since November 2016. Yeouch!

A closer look tells us that output and new export orders grew at a softer pace, while new orders fell for the first time since September 2016.

As if those aren’t gloomy enough, Markit also shred that confidence has dropped for a sixth straight month, which suggests that manufacturers have already begun to taper their expectations.

Cautious risk-taking

The Asian bourses and U.S. equity futures traded higher today despite weaknesses seen in last week’s trading.

Apparently, optimism over a healthy U.S. holiday sales season, the upcoming meeting between Trump and Xi Jinping this week, and a recovery in Japan’s tech sector all helped push equity prices higher.

  • Nikkei is up by 0.61% to 21,778.9
  • A SX 200 is down by 0.12% to 5,668.7
  • Shanghai index is up by 0.29% to 2,569.957
  • Hang Seng is up by 1.69% to 26,367.1

Commodity prices also rode the risk appetite train, with crude oil benchmarks recovering an almost 8% decline in the previous session.

  • Gold is up by 0.07% to $1,223.67
  • Brent crude oil is up by 0.71% to $59.56
  • U.S. WTI is up by 0.89% to $50.82

Major Market Mover(s):

AUD

The high-yielding Aussie took advantage of overall risk appetite and optimism over a possible talks of a trade deal between Trump and Xi Jinping at the G20 meetings this week.

AUD/USD is up by 14 pips (+0.19%) to .7244; AUD/JPY is up by 32 pips (+0.39%) to 81.99; AUD/CHF is up by 15 pips (+0.21%) to .7226; AUD/NZD is up by 12 pips (+0.12%) to 1.0674; EUR/AUD is down by 7 pips (-0.05%) to 1.5655, and GBP/AUD is down by 25 pips (-0.14%) to 1.7693.

JPY and CHF

Low-yielding currencies like the yen and franc took the biggest hits when markets felt the need to take more risks.

USD/JPY is up by 24 pips (+0.21%) to 113.19; EUR/JPY is up by 13 pips (+0.11%) to 128.37; GBP/JPY is up by 46 pips (+0.32%) to 145.08; CHF/JPY is up by 27 pips (+0.24%) to 113.47, and NZD/JPY is up by 25 pips (+0.33%) to 76.81.

USD/CHF is up by 7 pips (+0.07%) to .9975; GBP/CHF is up by 14 pips (+0.11%) to 1.2785; EUR/CHF is up by 13 pips (+0.11%) to 1.1313, and NZD/CHF is up by 11 pips (+0.16%) to .6769.

CAD

Not surprisingly, the Loonie got a double boost from overall risk appetite and a recovery in crude oil prices.

USD/CAD is down by 20 pips (-0.15%) to 1.3214; CAD/JPY is up by 36 pips (+0.42%) to 85.66; GBP/CAD is down by 18 pips (-0.11%) to 1.6935; CAD/CHF is up by 18 pips (+0.24%) to .7549, and EUR/CAD is down by 11 pips (-0.07%) to 1.4985.

Watch Out For:

  • 9:00 am GMT: Germany’s IfO business climate (102.3 expected, 102.8 previous)
  • 9:30 am GMT: U.K.’s High Street lending (38.9K expected, 38.5K previous)