News & Analysis

Today in Asia

December 6, 2018

By Deepta Bolaky

Equity Markets – The Arrest of Huawei’s CFO

Asian stocks continue to suffer on growing fears surrounding the yield curve inversion. Losses deepened on the reports that Huawei’s CFO, Wanzhou Meng, a Chinese citizen was arrested in Canada. Market participants are worried that the arrest may elevate tensions between the US and China.

We expect the selling pressure to continue in the upcoming sessions as the move against the Huawei CFO may add more uncertainties to the US-China relationship.

World Equity Indices (% Change)

Source: Bloomberg Terminal

Currency Markets

In the FX markets, investors are dropping riskier assets for safe-havens like the Japanese Yen and the yellow metal. The Yen emerged as the best performer among the G10 currencies while the Antipodeans suffered on the brewing tensions that may arise between the US and China.

Source: Bloomberg Terminal

On the data front, the Aussie Dollar found little support even though Retail Sales figures were upbeat as trade balance missed estimates.

AUDUSD (H4 Chart)

Source: GO MT4

The shared currency and the British Pound were relatively stable and trading in a tight range. We expect Brexit to remain the focus in the European markets.

EURUSD and GBPUSD (H1 Chart)

Source: GO MT4

Commodities Markets

Oil prices are swinging up and down as traders await for the headlines from the OPEC meeting.

USOUSD and UKOUSD (Weekly Chart)

Source: GO MT4 Chart: @DeeptaGOMarkets

Looking Ahead

03:15 Fed’s Quarles Speech (US)
11:05 RBA Assist Gov Debelle Speech (Australia)
15:15 ADP Employment Change (US)
15:30 Trade Balance, Continuing Jobless Claims, Nonfarm Productivity & Unit Labor Costs (US)
15:30/ 15:50 International Merchandise Trade and BoC Governor Poloz Speech (Canada)
16:45/17:00 Markit Services & Composite PMI, ISM Non-Manufacturing PMI and Factory Orders (US)
17:00 Ivey Purchasing Managers Index(Canada)
19:15 Fed’s Powell Speech (US)
n/a OPEC Meeting
n/a Fed’s Powell Speech (US)

The markets are gearing up for a busy calendar in the European and US session. Given that the US markets were closed for the funeral of former President, George H.W Bush on Wednesday, the economic data scheduled to be released yesterday were pushed forward for today.