RECAP

The Chinese stocks jumped with a Donald Trump-inspired rally following trade comments in a TV interview. Trump told Fox News that a deal with China has to be “great” because China has “drained” the U.S., this helped the Shanghai Composite gain 1.3%, while the Nikkei was up 1.6%, and the MSCI Asia Pacific rose 0.8%.

The USD/CNY advanced to a decade high after the parity fixing was set slightly above the forecasted figure. The Aussie led the Group-of-10 pack as rose 0.5%, with the Kiwi close behind, all the while the Bloomberg Dollar index was marginally higher.

The Treasury note yield was up 2bps to 3.10%, and the Aussie 10-year yield was up 1bps to 2.58%.

The WTI crude advanced to $67.20.

The Key Headlines of the Asian Session:

  • Trump sees ‘great deal’ with China, but says China not ready
  • Yuan reference rate at 6.9574 per USD; estimate 6.9548
  • South Korea FSC Chairman says stock market drop ‘excessive’: Yonhap
  • Australia Sept. building approvals +3.3% m/m; est. +3.8%
  • Japan Sept. unemployment rate at 2.3%; est. 2.4%

OUTLOOK

The Asian session saw some positive news coming from the late-night U.S. session as the market seemed to be interested with what President Donald Trump said in his interview. The President talked about a potential trade deal between the U.S. and China ending the Trade war between the largest two economies in the world.

As the European takes its time in the center-stage, investors will be focused on the possibility of a trade deal extending towards the European countries as well which should help stocks rally in early trading today. The Economic Calendar today showcases the Preliminary GDP in the Eurozone from the previous quarter. The expectation here is an increase of 0.4% compared to last month’s increase of 0.3%.

TRADERS VIEW

The yen weakened for a second day, while Australia’s dollar rallied after comments from U.S. President Donald Trump on a potential trade deal with China were seen as positive for risk. The U.S. dollar touched the strongest since May 2017 before paring gains, while Treasuries edged lower.

USDJPY – The pair is nearing the resistance at the October 22 high. Resistance is seen at the 112.89 followed by 114.10. Support, on the other hand, is seen at 111.38 followed by 110.38.

EURUSD – The pair has bearishly breached the support at October 9th low. Resistance is seen at 1.1550 followed by 1.1621. Support, on the other hand, is seen at 1.1336 followed by 1.1301.

EURJPY – The pair is seeking to consolidate on the short-term. Resistance is seen at the 128.44 followed by the 130.50. Support, on the other hand, is seen at 126.64 followed by 124.91.