Market Brief: HK Protests Triggers Mild Risk Off Sentiment


A summary of news and snapshot of moves from today’s Asia session.

View our guide on how to interpret the FX Dashboard

FX Brief:

  • A quiet start to the week with daily ranges averaging just 43% of their ATR’s overall. And, due to public holidays is US and Canada, we could be in for a quiet session without any market-moving news.
  • DXY trades just below its 3-week high achieved on Friday, AUD/USD has found support around its 20-day eMA and USD/JPY has broken beneath Friday’s bearish harami after finding resistance near the top of the bearish wedge outlined last week.  
  • Chinese producer prices fell -1.7% YoY, their fastest pace since July 2016 amid weak demand reflected in soft manufacturing PMI data and the ongoing trade war between US and China. In contrast, consumer prices expanded at their fastest rate in nearly 8 years by 3.8% YoY versus 3.3% expected. Rising pork prices from the swine flu epidemic are the main driver for higher prices.
  • Japan’s machinery orders declined -2.9% in September (+0.9% expected), making it the third consecutive negative month and raises concerns over business spending.
  • Electronic card retail spending in New Zealand fell -0.6% in October, its fastest contraction since May 2018. September’s figure was also revised lower to 0.2% from 0.4%.

Equity Brief:

  • Almost of all key Asian stock markets are in the red at the start of the trading week with the worst performer coming from the Hong Kong’s Hang Seng Index which has dropped by -2.20% so far, on track for its worst daily loss since 04 Oct 2019.
  • Rising geopolitical risk due to a fresh escalation of violence in Hong Kong where the police has fired live rounds and wounded at least one anti-government protestor on Monday morning is the main catalyst for today’s decline seen in Asian stocks after being basked in a “euphoric U.S -China trade deal optimism mood” last week.
  • Alibaba has kickstarted its annual flagship “Singles Day” online shopping event where it can be used as a gauge on the consumer health in China. Last year’s Singles Day sales growth of 27% was the lowest for Alibaba in the event’s 10-year history.
  • Australian’s ASX 200 has managed to buck against bearish sentiment by locking in a gain of 0.72% led by healthcare stocks such as CSL and Resmed that have surged by 2.1% and 1.7% while basic materials stocks have underperformed; Rio Tinto and Fortescue Metals have shed -1.7% and -3.7% respectively.
  • The S&P 500 E-Mini futures has also caught the Asian flu bug where it has dropped slightly by -0.28% in today’s Asian mid-session to print a current intraday low of 3081 after a positive close during the last hour trading on last Fri, 08 U.S. session.

Matt Simpson and Kelvin Wong both contributed to this article

Data from Refinitiv. Index names may not reflect tradable instruments and not all markets are available in all regions.

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