Asian Markets Trade Mostly Higher, European Markets Mixed

Asian markets and the Nikkei traded higher as the yen weakened and after taking a small breather from the Trump rally in the global equity markets. US financial markets were closed for the Thanksgiving holiday on Thursday.

We are seeing a lot of repositioning in the markets right now in the wake of Donald Trump winning the race for the White House on November 8. We saw a lot of money, over the year, coming into the emerging markets and now nearly a quarter of that has flowed out. There is still some more to go but the regional fundamentals are fairly sound and there are some good investments in the emerging markets.

The ASX 200, in Australia, was up nearly 0.6 percent this morning after a flat open. There were good broad based gains throughout the index. Only the gold sub-index saw losses as it fell 2.4 percent on the day.

In Japan, the Nikkei 225 was up over 0.7 percent as the yen continued to weaken against the US Dollar. As of 11:00 am HK time, the USD/JPY Forex market was trading at 113.65. This market, the USD/JPY, is at a near eight month high. A weaker yen tends to support the countries exporters as they sell, overseas in US Dollar and convert to the yen.

As far as economic data is concerned, Japan released its core consumer prices this morning. The CPI fell 0.4 percent in October, on an annual basis. This was in line with what economists had expected. However, it marks the eighth month in a row that the core CPI has fallen. This is likely to add to the heat the policymakers are feeling to add more stimulus to Japan’s stalling economy.

Turning our attention back to the Forex market, the US Dollar has been on a tear since Trump was elected president in the November 8 election. A Trump administration or Trumponomics will see the country boost fiscal spending and kick start inflation. There has also been a round of stronger-than-expected economic data out of the United States coupled with rising expectations that the Federal Reserve will raise its benchmark Fed Funds rate in December. This is lending support to the US Dollar and the selloff in US Treasuries which is boosting interest rates higher also continues.