Asia equities started the session on the backfoot despite the positive sentiment on Wall Street, where all major indices gained amid tech sector dip buying and with temper supported by better-than-expected US ISM services PMI. Oil benchmarks continued to trade higher. Worth noting that the US 30-Year yields have hit the highest level seen since June in early Asia trade. The rise in the US nominal and real yields could bring some volatility to the global FX complex, especially for the rate-sensitive Yen and the long duration equity sector as the tech.
The energy sector was top-performing again after oil and gas prices bolted firmer to new highs amid the extended fuel crisis and dust settling from the OPEC+ decision to keep oil output unchanged on Monday. A slight moderation in China-U.S. tensions could drive some of the price action. US President Biden recently highlighted a conversation with Chinese counterpart Xi, which saw the two leaders agreeing to abide by the Taiwan agreement. Attention now gravitates to the US Nonfarm Payrolls report on Friday, with the notoriously ambiguous ADP report today likely to set the mood ahead of such regardless. Although players expectations are not high with the number, as Fed Chair Powell pointed in the last meeting, several members of the FOMC and himself don’t see the need for a more substantial labour market to start tapering the bond-buying program in the coming months.
© 2019 High Leverage FX - All Rights Reserved.
© 2019 High Leverage FX - All Rights Reserved.