Asian markets were relatively calm following yesterday’s exaggerated rout. Most equity markets found a bid while currency markets drifted in to a more risk-on mood.
Equity markets rebound
The Japan225 index led the way in Asia with gains of more than 1.3%, potentially the first positive day in four. China shares were close behind, with the China50 index posting gains of 1.28% while the HongKong33 index added 0.61%. US index futures pointed toward a higher open today with average gains of about 0.45%.
Japan225 Daily Chart
On the currency front, the yen staged a slight retreat, with USD/JPY rising 0.13% and AUD/USD snapping a two-day decline with gains of 0.27%.
Crude oil markets attempted a rebound after yesterday’s slump saw the commodity hit more than one-year lows. West Texas Intermediate is now hovering around the $54 handle. The rebound could have been helped by API data late yesterday which surprisingly showed the first drawdown from oil inventories in five weeks. This evening, we will see the EIA’s equivalent of the data as at November 16. Last week saw the biggest inventory build since February 2017.
WTI Daily Chart
GBP steady ahead of PM May’s visit to Europe
GBP/USD is holding near three-day lows as UK PM May heads to Europe to meet with European Commission president Juncker. The meeting is unlikely to produce any definitive results or announcements on Brexit, as negotiations and alternative agendas keep being introduced, but markets will be on high alert for any news snippets. GBP/USD is now at 1.2786 with possible rising trendline support coming in at about 1.2713.
GBP/USD Daily Chart
US Durable goods orders on tap
It’s a barren data calendar for Europe, though the European Commission is due to deliver its comments on Italy’s 2019 budget proposals. Italy’s Deputy Prime Minister has said he is open to discussions on their budget proposals, and may be open to some budget cuts but would prefer to keep proposed reforms in place.
The US calendar features October durable goods orders for October with the ex-transportation reading expected to increase 0.4% after a 0.1% gain in September. The mixed housing data yesterday of housing starts and building permits (starts above forecast, permits below estimate) will be complemented by existing home sales today. Sales are seen rising 1.0% m/m after a 3.4% decline in September.
The full MarketPulse data calendar can be viewed at https://www.marketpulse.com/economic-events/
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