Almost all quiet on the Eastern Front

With the US closed for Thanksgiving and little to get excited about on the news front, the Asian session has had a muted start. Markets have ignored President Trump’s statement that he would concede once the US electoral college confirmed President-elect Biden’s win, reinforcing the impression that the US election has rapidly become yesterday’s news. Early trading in Asian stock markets has seen them edge lower, with India’s mass ban on more Chinese companies’ products continuing to weigh on mainland markets, which are nervous after a run of corporate defaults and increased oversight of the technology sector. The news the AstraZeneca intends to conduct more trials of its Covid-19 vaccine after criticism of its data may also be weighing on investor’s nerves, giving them the excuse to take more exposure of the table into the weekend. Early closes today on US bond and equity markets will likely ensue volatility remains modest.

China Industrial Profits was the highlight of an otherwise dull Asian calendar today. Industrial Profits surged 28.20% for October YoY and rose 0.70% on an annual basis from January to October. That was 6th straight month of increases, and the volatility of the YoY numbers aside, further confirms the strength of the China manufacturing recovery. Those gains may be harder to maintain as the US and Europe face an inevitable Covid-19 slowdown, and domestic consumption and credit woes remain concerns. But the overall picture confirms that China is doing better than most and will lead Asia’s recovery into 2021.

Malaysia’s government survived to fight another day overnight, with Parliament passing the second reading of the 2021 budget. A loss would have amounted to losing a vote of no confidence. The ringgit and Malaysian equities rallied on the news, but the government still faces a series of votes on individual parts of the budget in the weeks ahead. Nevertheless, political risk has reduced markedly and should allow Malaysia to outperform with the rest of ASEAN into the new year as the vaccine-led recovery gathers pace in H1.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Jeffrey Halley

Jeffrey Halley

Senior Market Analyst - Asia Pacific
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia and the New York Times. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

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