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Bob Mason
Asian Markets Rally

Earlier in the Day:

There were no material stats released through the Asian session this morning to provide direction for the markets, leaving the markets to respond to the more dovish than anticipated FED Chair Powell speech from Jackson Hole on Friday.

While risk on sentiment through the morning was reflected in the equity markets, the Japanese Yen was up 0.15% to ¥111.07 against the Dollar at the time of writing, the markets moving on from the roll out of the anticipated 25% tariffs on an additional $16bn worth of Chinese goods, with the Dollar on the back foot at the start of the week.

Elsewhere, the Aussie Dollar was down just 0.05% to $0.7325, the Aussie Dollar giving back some of last Friday’s gains, which had come off the back of last week’s response to Prime Minister Turnbull’s ousting. For the Kiwi Dollar, things were a little better, the Kiwi Dollar up 0.31% to $0.6691, with support coming off the back of some better than expected stats released last week that suggested the RBNZ may be delivering more dovish than necessary signals to the market.

In the equity markets, the risk on sentiment was reflected across the equity majors, with the Hang Seng and CSI300 leading the way, rallying by 2.01% and 1.99% respectively, while the Nikkei and ASX200 were up 0.85% and 0.32% respectively. Tech and energy stocks led the way on the Hang Seng, as the markets responded to the record closes in the U.S on Friday and U.S futures pointing to more gains at today’s open.

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The Day Ahead:

For the EUR, economic data scheduled for release is limited to Germany business climate index figures and unemployment numbers out of France. The key driver will be the business sentiment figures, which are forecasted to be EUR positive.

At the time of writing, the EUR was up 0.02% to $1.1624, with today’s stats and any chatter on U.S – China trade war to also influence later in the day.

For the Pound, there are no material stats scheduled for release today, with UK markets closed, which will leave the Pound in the hands of market sentiment towards Brexit that continues to be a negative near-term, the British government yet to find a resolution to Ireland, leaving trade talks on the back burner as the Brexit clock continues to tick away.

At the time of writing, the Pound was up 0.06% to $1.2854.

Across the Pond, economic data scheduled for release through the day includes Chicago and Dallas FED National Activity Index figures that will provide the Dollar with some direction, the markets continuing to look for any cracks in the U.S economy that could pin the FED back from a continued move towards normalization.

The FED’s concerns over the U.S – China trade war will make the Dollar more sensitive to economic indicators going forward, though we can expect noise from the Oval Office and Capitol Hill to continue having an impact.

At the time of writing, the Dollar Spot Index was down 0.03% to 95.116, with today’s stats and the ever present Oval Office the key drivers through the day.

For the Loonie, there are no material stats scheduled for release through the day, with talks of a possible deal between the U.S and Mexico on NAFTA as early as today likely to lead to a return of the Canadian government to the negotiating table later in the week.

Market sentiment towards Canada’s prospects at negotiating favourable terms will provide direction as the week progresses, though for the day ahead we can expect direction to be hinged on noise from the Oval Office.

At the time of writing, the Loonie was up 0.05% to C$1.3019, with NAFTA chatter the key driver.

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