Article / 17 November 2015 at 8:01 GMT

Morning Markets: Wave of relief rolls across Asia

Consulting editor / TradingFloor
Norway







MM Table

 

Watchlist

  • SG Merchandise trade (published)
  • NO GDP (0900 GMT)
  • GB Monthly inflation data, CPI, PPI (0930 GMT)
  • DE ZEW indicator of economic sentiment (1000 GMT)
  • US CPI (1330 GMT)
  • US Industrial production and capacity utilisation (1415 GMT)
  • US NAHB housing market index (1500 GMT)
  • US API weekly statistical bulletin - crude oil and gasoline stocks (2130 GMT)

Asian stock markets rose in a broad-based relief rally on Tuesday, lifted by Wall Street's gains overnight as fears of the market impact of Friday's terror attacks in Paris receded.

Hong Kong's Hang Seng was up 1.4% and Japan's Nikkei 225 gained 1.2 % by 0738 GMT, but the Shanghai Composite reversed and returned to flat readings after earlier gaining as much as 1.9%.

European stocks were expected to open higher on the back of the Asian rally, the higher US close overnight, and firmer oil.

Crude oil gained slightly after a jump on Monday, which had been propelled by the fallout of the Paris terror attacks -- expectations that higher geopolitical tensions could disrupt the world's oil supply.

Gold, which had also risen on Monday as a conventional safe haven, also flattened out.

The dollar stayed firm on continued expectations of a Federal Reserve rate increase next month, and the euro weakened to new seven-month lows below 1.07 to the dollar.

Tuesday brings a slew of economic data, including UK inflation, Germany's ZEW econommic sentiment indicator, and US CPI, industrial production and capacity utilisation figures. 

Analysts are looking for a slight rise in October US industrial output, which would be the first increase in three months. 


Market signals

Asian session

  • Vale/BHP Billiton joint venture to set aside $26m for initial Brazil dam clean-up 
  • Asia shares surged, with MSCI's index of Asia-Pacific shares up 1.6% at 0310 GMT 
  • At the same time, South Korea's Kospi was up 1.3%, Australian shares gained 1.4%  
  • The Shanghai Composite climbed 1.7% and Japan's Nikkei added 1.6%.  
  • Gold futures for December delivery gained 0.2% to settle at $1,083.60/oz overnight 
  • West Texas Intermediate crude advanced 2.5% after touching $40.06 last night 
  • Iron ore dropped to a four-month low as demand from China continues to soften 
  • Iron ore lost 0.8% overnight to hit $47.74, closing in on its 10-year low 
  • Copper futures for December delivery dropped 2.4% to $2.1155/pound on Comex 
  • The AUD was lower at 0100 GMT at 0.7094, down from 0.7114 yesterday 

Forex ahead

  • USD stays firm on expectations of Fed hike
  • EURUSD hits seven-month lows
  • CHF at multi-year highs
  • AUDUSD sending bearish signals

From the Floor

Turning heads. “The situation in France is likely to tilt those ECB doubters prior to the December 3 meeting to the dovish side,” says John J Hardy.

Heated talks. Opec’s basket price has dropped below $40/b for the first time since 2009 — the weaker the price ahead of the meeting, the bigger the discussion will be,” says Ole Hansen.

Energy boost.Overall, like what we saw in the US, energy was one of the best-performing sectors (in Asian equity markets),” says Thurai.

Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.

In opinion

1...2...3
There seems to be more hope than expectation in both US and European manufacturing numbers, says James Picerno -- even tiny gains are cheered on.

Markets regroup
The Saxo APAC Sales Trading team says while the USD continues its rally against G10 currencies, equities markets are fairly calm after the tragic events in Paris.

Stand up Alibaba
If fourth-quarter earnings are the standard, then Alibaba has made a meal of all other rivals and should go straight to the top of the class, says Neil Flynn.

Inflation, inflation, inflation
The recent surge in the USD won't amount to a hill of beans if the inflation numbers in the US don't match up, says Max McKegg. Nor will the Fed be too inclined to tighten

Contempt for terror
TradngFloor.com adds its voice to a "wall of contempt" and complete rejection of the terror that is threatening to become commonplace in Europe, writes Martin O'Rourke.

Wake-up call
The Paris attacks are a wake-up call for markets on geopolitical risk and how we constantly ignore the facts about the problems of the world, writes Steen Jakobsen.

Momentum lost
An October rally in Russian equities has lost speed, and weak oil prices and increased risk aversion could spell a tough patch ahead for Russian stocks, writes  Nadia Kazakova.

Brookly rush hour

 

The American economy is in focus, as key data on Tuesday include US inflation and industrial production figures. Photo: iStock

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