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Asian markets extended the risk-friendly vibe from the previous session as they priced in Powell’s surprising shift from a hawkish stance.

  • Japan’s retail sales grew by 3.5% in October vs. 2.7% expected, 2.2%
  • NZ ANZ business confidence maintains -37.1 reading in November
  • AU quarterly private capex dips by 0.5% vs. 1.1% growth expected, 0.9% slip in Q2 2018
  • AU HIA new home sales down by 0.8% vs. 1.1% uptick in September
  • BOJ’s Masai: “weigh the costs and benefits of prolonged easing”

Major Events/Reports:

China to widen market access to foreigners?

In a speech before Spain’s upper house of parliament, Chinese President Xi Jinping shated that:

“China will make efforts to open, even more, its doors to the exterior world and we will make efforts to streamline access to markets in the areas of investment and protect intellectual property…”

The keywords were a bit too similar to the U.S. grievances on China’s business practices, so the effort to address the issues might have been taken as positive steps ahead of Xi and Trump’s meeting this weekend.

Still, Xi and Spanish Prime Minister Pedro Sanchez mentioned in their joint declaration that they back “an open and balanced global economy based on WTO rules, reaffirming their commitment to fighting protectionism and unilateralism.”

Talk about throwing shade!

BOJ member calls for re-examining prolonged easing

Earlier today Bank of Japan (BOJ) member Takako Masai repeated her support for maintaining the central bank’s massive stimulus program to achieve its 2.0% inflation target.

However, Masai also stressed that “prolonged low rates could have adverse effects on bond market functions and financial institutions’ profit,” and called for the BOJ to “thoroughly scrutinize the costs and benefits of its policy from various perspectives.”

Will the nine-member BOJ board soon put on their thinking caps to become more flexible in their policies?

Positive round for equities and commodities

The Asian bourses tracked their Wall Street counterparts and celebrated the Powell’s latest dovish shift.

If you recall, the Fed head honcho shared that the Fed’s policy rate is now “just below” the neutral level, which is a swing from his October remarks that rates were a “long way from neutral at this point.”

Not surprisingly, the prospect of steady borrowing costs kept the Asian equities afloat:

  • Nikkei is up by 0.73% to 22,338.3
  • A SX 200 is up by 0.17% to 5,762.6
  • Shanghai index is up by 0.28% to 2,608.993
  • Hang Seng is down by 0.13% to 26,646.8

Commodity prices were also in the risk appetite train as gold took advantage of the dollar’s weakness while crude oil prices clawed their way higher after losses seen earlier this week.

  • Gold is up by 0.21% to $1,223.38
  • Brent crude oil is up by 0.48% to $58.98
  • U.S. WTI is up by 0.78% to $50.66

Major Market Mover(s):

JPY

The bulls ate up the yen for most of the session thanks to a combo of weak dollar, strong Japanese retail sales data, and a BOJ member encouraging debates on the impact of prolonged easing.

USD/JPY is down by 29 pips (-0.25%) to 113.39; EUR/JPY is down by 18 pips (-0.14%) to 129.02; GBP/JPY is down by 25 pips (-0.17%) to 145.51; AUD/JPY is down by 18 pips (-0.21%) to 82.87; CAD/JPY is down by 18 pips (-0.21%) to 85.43, and CHF/JPY is down by 15 pips (-0.13%) to 114.22.

NZD

Traders weren’t too impressed with the Kiwi especially after ANZ’s business sentiment index steadied at a relatively low level in November after bouncing in September and steadying in October.

NZD/USD is down by 17 pips (-0.24%) to .6853; NZD/JPY is down by 37 pips (-0.48%) to 77.70; GBP/NZD is up by 62 pips (+0.33%) to 1.8726; EUR/NZD is up by 59 pips (+0.36%) to 1.6604; AUD/NZD is up by 32 pips (+0.30%) to 1.0664, and NZD/CHF is down by 20 pips (-0.29%) to .6803.

Watch Out For:

  • 6:45 am GMT: Switzerland’s quarterly GDP (0.4% expected, 0.7% previous)
  • 7:45 am GMT: France’s consumer spending (0.6% expected, -1.7% previous)
  • 7:45 am GMT: France’s GDP (q/q) to remain at 0.4%?
  • 7:45 am GMT: France’s GDP (q/q) to remain at 0.4%?
  • 8:55 am GMT: Germany’s unemployment rate expected to maintain 5.1% growth
  • 8:55 am GMT: Germany’s unemployment change (-10.0K expected, -11.0K previous)
  • 9:30 am GMT: U.K.’s net individual lending (4.5B GBP expected, 4.7B GBP previous)
  • 9:30 am GMT: U.K.’s mortgage approvals to remain at 65K?
  • 10:00 am GMT: Euro Zone’s business and consumer confidence
  • 11:30 am GMT: ECB’s financial stability review