Risk Appetite Rallies In Asia
| Jul 22, 2014 06:19AM ET
In spite of significant geopolitical tensions, risk appetite rallied back in most assets. Regional Asian equity indices were all in the green. The Nikkei experience a large gap up at 15,364.51 waving off yesterdays sluggish performances in Europe and on Wall Street. Other indices fared well as the Hang Seng rose 1.36% and Shanghai composite climbed 1.03%. AUD/USD rose to 0.9396 on short covering as the RBA Governor Stevens speech didn’t provide the fireworks on rates or FX many had anticipated. RBA Governor Steven's speech concentrated on the issues and policy since the 2008 financial crisis. But had little specific comments on Australia’s current situation or policy strategy. After the long weekend JPY traded in a bullish summer style. USD/JPY rose to 101.57 as traders realized the Nikkei gains would hold but trading remained thin. BoJ Governor Kuroda was on the wires suggesting that he would not hesitate to adjust monetary policy should risks to progam increase. But the tough talk had a muted direct effect on JPY. He then went on to state the corporate line that the BoJ has halfway towards achieving their price target and would continue with QQE, which was working. Comments only worth noting on this financial news deprived session.
Traders focus today will remain on events surrounding the Ukraine and Gaza with only 2nd tier data scheduled. EU leader are scheduled to meet to discuss options regarding the Ukraine. Despite today’s risk rally, safe-haven trades are broadly in demand with gold, USD and U.S. 10-Year treasury yields (hovering around 2.5%) still viewed has hedges against geopolitical risks. In EM markets, verbal pressure and new sanctions on Russia has had a profound effect on Russian equity markets. Russian stocks are near a 3-month low and down over 7% in the last 10 days. However, so far there is scant sign of real contagion with sell-offs being contain to local markets.
On the docket today, we have UK Private Sector Net Borrowing which is anticipated to fall to 9.4bn in June verse 11.5bn in May. In Switzerland, trade balance is expected to drop slightly to 2.78bn in June from 2.85bn in May. And finally in the US, Headline CPI y/y should increase to 2.2% y/y while existing home sales should see a health recovery to 5M.
Get The News You Want
Currency Tech
EUR/USD
R 2: 1.3559
R 1: 1.3545
CURRENT: 1.3521
S 1: 1.3518
S 2: 1.3498
GBP/USD
R 2: 1.7122
R 1: 1.7100
CURRENT: 1.7078
S 1: 1.7074
S 2: 1.7050
USD/JPY
R 2: 101.58
R 1: 101.41
CURRENT: 101.52
S 1: 101.21
S 2: 101.07
USD/CHF
R 2: 0.9002
R 1: 0.8990
CURRENT: 0.8985
S 1: 0.8971
S 2: 0.8960
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.