Fragile market sentiment may dampen Asian share trading

Asian stocks are expected to open lower today after U.S. markets pared some of their recent gains. Shares were lower after a representative for German Chancellor Angela Merkel said European leaders might be unable to completely address every sovereign debt issue at a Eurozone summit on October 23. 

While this seems like a reasonable assertion, it shows just how fragile market sentiment is at the moment. The EUR/USD is still strong above the 1.37 level, though other risk currencies like the AUD/USD for example pulled back more on the news. The risk on, risk off trade, continues to come and go on a daily basis. 

In Australia, minutes of the meeting from the Reserve Bank of  Australia (RBA) will be closely watched today with the likelihood of a November rate cut to be expressed in more detail through the minutes. 

   The Aussie dollar is currently trading near its 50 day moving average of 1.0165 at time of writing. In corporate news, telco giant Telstra will put an $11bn deal with the government owned NBN Co. to its shareholders today. The outcome is crucial not only for Telstra’s own capital management but the way in which Australia’s broadband industry shapes up. 

In other regional news, Thailand’s central bank is expected to leave rates on hold when it meets tomorrow after seven consecutive interest rate increases. Growth in the country has been disrupted by some of the worst floods in five decades and weaker global growth spilling over into the economy. The Bank of Thailand is expected to maintain its benchmark daily bon repurchase rate at 3.5%.