Morning Markets: Abe win drives Japanese shares higher
- EU: Flash Consumer Confidence (1400 GMT)
- CA: Monthly Wholesale Sales: (1230 GMT)
Japanese prime minister Shinzo Abe won an easy electoral victory this weekend, with his Liberal Democratic party coalition now in possession of a parliamentary supermajority that expands his mandate for constitutional reform and his Abenomics programme designed to jolt the Japanese economy out of its prolonged stagnation.
Abe’s victory was met Monday by a Nikkei rally that took the index up 1.11% while the yen headed lower with USDJP rising to the 1.1375 area. According to CNBC, however, only half of Japanese voters were willing to endorse Abe’s performance to date in a recent poll, meaning that while the PM may have come out well ahead of a hapless opposition, approval ratings are likely to be an issue as Abe pushes ahead with planned changes.
Elsewhere in Asia, Hong Kong shares fell by 0.64% as financials headed lower while Australian stocks fell by 0.22% on the back of industrial and real estate declines as well as a stronger AUD.
Oil prices remain supported by clashes between Iraqi and Kurdish forces with the former having now taken the oil-producing Kirkuk province and pushing ahead to the capital or Erbil. In Europe, the Catalan regional parliament is set to agree on a response to Madrid’s imposition of direct rule in the breakaway province, a move that Catalan leader Carles Puigdemont has called “the worst attack on insititutions since Franco”.
On the data calendar, today sees the EU flash consumer confidence indicator out at 1400 GMT.
- Japanese Prime Minister Shinzo Abe won victory in lower house elections on Sunday
- Abe's ruling coalition is expected to retain its two-thirds majority in parliament
- The Nikkei surged and was up 1.11% at its close
- Other Asian markets were mixed; the ASX 200 closed down 0.22% to 5,894
- China's new-home prices rose 6.3% in September against the same month last year
- The result represents a deceleration from the 8.3% year-on-year expansion in August
- ANZ Bank reached a settlement with the securities regulator over rate-rigging allegations
- Markets in New Zealand and Thailand are closed for a public holiday
- The yen was at three-month lows after Shinzo Abe's election win
- The euro eased as Spain’s constitutional crisis fueled concerns about political unity
- Sterling is on the rise with the 1.32 level in focus for cable
- AUDJPY rose by 0.65% in the wake of Abe's commanding electoral victory
From the Floor
QT soon? “The ECB is the highlight of the week, we’ll be looking for news of a taper schedule,” says Hardy
Victory in Japan. “Foreign investors will increase their exposure to Japanese equities after Abe’s win,” says Garnry
Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.
Australia's mining shares were higher after spot iron ore prices rose 2.6% on Friday, says Saxo Capital Markets (Australia). And sentiment continues to remain positive.
Abe it is
Shinzo Abe was easily re-elected as Japanese Prime Minister and the market responded overwhelmingly positively, says Saxo's Singapore team.
It's all bull
With the US jobs market at white-hot levels and global growth looking strong, this is a bull market by any name, says Kay Van-Petersen.
Morning Markets goes out on the TradingFloor platform at 07:00 GMT, Monday to Friday.
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