Asia questions the good mood from Wall Street

US indices ease back

A perceived easing in US-China trade tensions, with US President Trump commenting that a deal could come “sooner than you think”, boosted Wall Street yesterday but the positive mood has failed to extend today’s Asian morning session. US indices have retreated between 0.07% and 0.18% with Australian shares under-performing with the AU200 index losing 0.51%.

China shares are a touch higher after Trump’s trade deal comments but the HongKong33 index has taken a hit amid reports that bookings from China for next week’s National Day week-long holiday are down heavily from last year amid the anti-government protests.

Kiwi bounces on RBNZ chief’s comments

RBNZ Governor Orr said today that the current view is the Bank will not need to use “unconventional” monetary policy tools, but nevertheless we must have them on standby, if necessary. Like most central banks, the RBNZ is battling the challenge of a benign inflation environment that is consistently running below target, he said, adding that he believes the recent big rate cut is working through the economy.

The New Zealand dollar rose after the comments, adding 0.52% versus the US dollar and 0.43% versus the Japanese yen.

NZD/USD Daily Chart

Source: OANDA fxTrade

Will pending home sales match new ones?

The better-than-forecast jump in new home sales in August released yesterday could be echoed in the pending sales data released today. Pending home sales are seen rising 0.9% m/m last month after a 2.5% decline in July, latest surveys show. We also see the goods trade balance for last month, with the deficit seen widening to $77.3 billion from $72.3 billion in July. No doubt the Fed’s Bullard will continue his dovish rhetoric in his speech today while Vice Chair Clarida also has a dovish leaning.

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