News & Analysis

Today in Asia – Risk Tone Softer

May 16, 2019

By Deepta Bolaky

Equity Markets

It was a mixed performance in the Asian markets. President Trump ramped up pressure to curb Huawei Technologies Co.’s access to the US markets and American suppliers. He signed an executive order declaring a national emergency and barring US companies from using telecommunications equipment made by firms posing a national security risk. However, investors are holding up as auto tariffs has been delayed and there is positive news on the Canada and Mexico trade deal.

In the Australian share market, the financial sector was the biggest laggard of the ASX200 today. McMillan Shakespeare Ltd emerged as the worst performing stock and was down by 4.02%.

ASX200 (Best and Worst Performing Stocks)

Source: Bloomberg Terminal

Currency Markets

In the FX space, the Antipodeans remained on the downside and emerged as the worst performers against the US dollar among the G10 currencies.

Source: Bloomberg Terminal

The Aussie dollar remains poised to the downside as the unexpected rise in unemployment data increased the bets that the RBA will cut interest rates sooner than later. The AUDUSD pair touched four months low and is now buying at 69.10 US cents.

The British Pound was relatively flat against the US dollar as traders are gearing up for more political tensions in the UK Parliament. There are growing calls for the Prime Minister to step down before the 15th of June and it was reported that an MP said they could even change the rules to allow for another no-confidence vote which will likely oscillate sentiment for local currency.

On the technical side, the GBPUSD pair dropped below the 1.29, a key resistance level and is currently in the oversold territory as per the daily chart.

GBPUSD (Daily Chart)

Source: GO MT4

Oil Markets

A drop in gasoline supplies as per a government report helped oil prices to extend gains despite a bearish EIA report. However, oil traders are looking for another bullish catalyst to push prices further to the upside. Both WTI and Brent Crude has been trading in a tight range at $62.633 and $71.616 respectively.

UKOUSD and USOUSD (Hourly Chart)

Source: GO MT4

Looking Ahead

Housing Starts, Building Permits, Jobless Claims, and Fed Manufacturing Survey (US)