Boeing bounce short-lived
The positive news from Boeing late yesterday that helped the US30 index rebound into positive territory at the close has faded during the Asia morning session. The US30 index closed 0.07% higher yesterday but has already fallen 0.17% so far today. The other US indices, which didn’t benefit from Boeing’s update as to when the 737 MAX jet will fly again, were down between 0.18% and 0.27%. One factor that had been pressuring markets was US President Donald Trump’s weekend comments that there had been incorrect reporting that the US was willing to lift tariffs on China. Let’s see if there is an update to that comments when he speaks today.
Hong Kong shares were down for a third straight day today after the violence in the Region’s protests escalated yesterday, with one person shot and another set on fire. The HK33 index fell 1.27% bringing the losses over the past three sessions to almost 4%. China shares were caught up in the downdraught, with the CN50 index losing 1.15%.
The broader risk-off trade was evident in currency markets, with the Australian dollar coming under pressure, despite better data. AUD/JPY fell 0.09% and AUD/USD slid 0.18% and looks set to close below the 100-day moving average at 0.6848 for the first time since October 28.
AUD/USD Daily Chart
Australia business sentiment improves
Business sentiment surveys undertaken by National Australia Bank both showed some improvement in October. The Business Conditions index rose from +2 tp+3 while the more forward-looking Business Confidence index jumped to +2 from a flat reading in September. There was a knee-jerk reaction higher in AUD/USD, but that only lasted a matter of minutes as the FX pair retreated quickly from the intra-day high of 0.6855.
Speakers’ corner
There’s a long list of speakers today ranging from the ECB to the Fed to US President Trump. ECB’s Coeure and Mersch set the ball rolling followed by Fed Vice-Chair Clarida. President Trump’s speech to the Economic Club of New York does not have a time slot attached to it, but markets will be alert for any updates on the US-China Phase 1 trade deal. Speeches from Fed’s Barkin, Harper and Kashkari can be heard throughout the session.
On the data front, UK unemployment data for October are due along with September’s average earnings numbers. The ZEW surveys for both Germany and the Euro-zone follow with the German ones expected to show improvement (though still heavily negative) while the Euro-zone’s economic sentiment index is seen worsening to -32.5.
