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Asia Summary

Asian equity markets are trading generally higher, after most of the US stock indices ended in positive territory on Wednesday. The MSCI Asia Pacific Index has traded near fresh record highs.

The Nikkei 225 has rallied by over 2%. Index-component Fast Retailing has gained over 2.7%, while the overall TOPIX Retail Trade index has risen by more than 0.9%. The TOPIX Securities broker index has gained over 1.5%, amid the gains in the equity markets.

Japanese megabanks are also trading higher. Shares of Mitsubishi UFJ have risen by over 0.7%. In Hong Kong, the Hang Seng Financials index is higher by more than 0.5%, amid gains in the insurance sector. Earlier today, China's insurance regulator, the CIRC, said Jan-Sept total premium income for the industry rose by 21% y/y

Shares of tech name, Tencent, have risen by over 1% and the overall Hang Seng Information Technology index has gained over 1%. Japanese video game maker, Square Enix, has gained over 5%, as Q2 earnings beat market expectations. Toshiba reiterated its FY outlook.

Large steelmakers in Japan are trading generally higher, following the losses seen on Wednesday, with shares of Nippon Steel up by over 3.5%. US Steel's shares closed higher by over 1% in the NY session. In Australia, the ASX 200 Resources index has risen by over 0.8%. On Wednesday's session, copper and gold futures ended the session higher. Shares of gold miner, Newcrest, are up over 0.5%. The ASX Utilities index is higher by over 0.5%.

Meanwhile, the ASX 200 REIT index has risen by over 1%, adding onto the gains seen in the prior session.

On the macro front, China's Oct inflation data (CPI, PPI) were higher than expected. US President Trump said there was no more important subject than US-China relations, following his earlier meeting with China's President Xi. Trump later said that the US trade deficit with China is 'shockingly high.'

At the same time, a Chinese Commerce Ministry official said the two countries have signed over $253B worth of business deals, including in the semiconductor and auto industries.

In New Zealand, the Kiwi has declined by over 0.1%. Earlier today, the Reserve Bank of New Zealand (RBNZ) left its cash rate unchanged as expected and reiterated that policy would remain accommodative for a considerable period.

The Aussie has erased the declines seen after the weaker than expected Sept Home Loans data. Looking ahead, the Reserve Bank of Australia (RBA) is due to release its quarterly monetary policy statement and economic forecasts on Friday.

Key economic data

(CN) CHINA OCT CPI M/M: 0.1% V 0.2%E; Y/Y: 1.9% (highest since Jan reading of 2.5%) V 1.8%E; PPI Y/Y: 6.9% V 6.6%E

(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES CASH RATE (OCR) UNCHANGED AT 1.75%; AS EXPECTED

((JP) Japan Sept Current Account Balance: ¥2.27T v ¥2.36Te; Adj: ¥1.84T v ¥2.053Te; Trade Balance: ¥852.2B v ¥832.5Be

(JP) Bank of Japan (BOJ) Summary of Opinions at Oct. 30-31th Meeting: should maintain easing policies until the inflation mandated is achieved

(AU) Australia Sept Home Loans M/M: -2.3% v 2.0%e; Investment Lending: -6.2% v 4.3% prior

Speakers and Press

Japan

(JP) Bank of Japan (BOJ) Member Funo: Vital to keep pushing strong monetary easing; CPI to rise to 2% target and help stabilize FX

(JP) Japan LDP Tax Chief: Not considering high tax on cigarettes

Korea

(KR) Bank of Korea (BOK) quarterly monetary policy statement: economic expansion close to its potential growth rate and inflation near target, conditions are coming together for an adjustment to monetary policy

(KR) Pres Trump reiterates last night's speech to Korean parliament via tweet: "NoKo has interpreted America's past restraint as weakness. This would be a fatal miscalculation. Do not underestimate us. AND DO NOT TRY US." (US session)

Australia/New Zealand

(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) GOV SPENCER: ECONOMIC OUTLOOK IS VERY POSITIVE OVERALL

(NZ) New Zealand Fin Min Robertson: Exact spending plans not finalized, need revenue and growth outlook for spending plan

(AU) Western Australia Treasurer Wyatt: begun talks with the gold industry in the state about a royalty hike for producers after an earlier proposal failed

(NZ) RBNZ McDermott: New Zealand Dollar (NZ$) 'looks about right'; policy stance is 'neutral' though not 'firmly neutral'

China/Hong Kong

(CN) China President Xi: Vast potential exists in China-US economic ties; China willing to significantly raise imports from the US

(US) US President Trump: No more important subject than US-China relations

(US) US State Dept: Confirms China sovereign wealth fund, CIC, and Goldman sign agreement to create China-US industrial cooperation fund

(CN) China securities regulator (CSRC) may focus on business sustainability as part of IPO review - Chinese Press

Asian Equity Indices/Futures (23:00ET)

Nikkei +1.8%, Hang Seng +0.9%; Shanghai Composite +0.0%; ASX200 +0.6%, Kospi +0.1%

Equity Futures: S&P500 +0.1%; Nasdaq100 +0.0%, Dax +0.2%; FTSE100 +0.3%

FX ranges/Commodities/Fixed Income (23:00ET)

EUR 1.600-1.1586; JPY 114.07-113.80; AUD 0.7689-0.7663;NZD 0.6972-0.6945

Dec Gold +0.3% at $1,281/oz; Dec Crude Oil +0.1% at $56.88/brl; Dec Copper -0.3% at $3.09/lb

(CN) PBoC OMO: injects CNY40B v CNY160B prior in 7-day, 14-day and 63-day reverse repos; Net drain CNY0B v drain CNY40B prior

(JP) Japan MoF sells ¥647.3B in 0.8% (0.8% prior) 30-yr bonds; Avg yield: 0.789% v 0.8810% prior; Bid to cover: 3.43x v 3.98x prior

USD/CNY *(CN) PBOC SETS YUAN REFERENCE RATE AT 6.6325 V 6.6277 PRIOR

Equities notable movers

PRR.AU To present new data from TACTI-mel Ph I clinical trial in Australia investigating use of eftilagimod alpha in combination with pembrolizumab (KEYTRUDA) in unresectable or metastatic melanoma patients; +7%

DCG.AU Awarded A$75M contract from BHP; +6.5%

6479.JP Reports H1 Net ¥34.3B v ¥12.8B y/y; Op ¥41.9B v ¥18.6B y/y; Rev ¥429.0B v ¥275.1B y/y; +12%

5871.TW Reports 9M Net NT$7.0B, +29% y/y; +9.5%

179.HK Reports H1 Net $140M v $121M y/y, Rev $1.53B v $1.37B y/y; -8.5%

For the 24 hours to 23:00 GMT, the AUD rose 0.38% against the USD and closed at 0.7679.

LME Copper prices declined 0.7% or $51.0/MT to $6812.0/MT. Aluminium prices declined 1.3% or $27.5/MT to $2103.5/MT.

In the Asian session, at GMT0400, the pair is trading at 0.7680, with the AUD trading marginally higher against the USD from yesterday's close.

Overnight data revealed Australia's seasonally adjusted home loan approvals unexpectedly declined by 2.3% on a monthly basis in September, defying market consensus for a rise of 2.0%. In the prior month, home loan approvals had risen 1.0%.

Elsewhere in China, Australia's largest trading partner, the consumer price index (CPI) advanced more-than-expected by 1.9% on an annual basis in October, accelerating to a nine-month high and following a rise of 1.6% in the previous month. Market participants had anticipated the CPI to climb 1.8%. Further, the nation's producer price index rose 6.9% on a yearly basis in October, compared to a similar rise in the previous month, while markets had expected for a rise of 6.6%.

The pair is expected to find support at 0.7653, and a fall through could take it to the next support level of 0.7627. The pair is expected to find its first resistance at 0.7698, and a rise through could take it to the next resistance level of 0.7717.

Looking ahead, market participants would eye the Reserve Bank of Australia's monetary policy statement, slated to release overnight.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the EUR slightly declined against the USD and closed at 1.1595.

Macroeconomic data released in the US showed that mortgage applications remained flat in the week ended 03 November, comparted to a drop of 2.6% in the previous week.

In the Asian session, at GMT0400, the pair is trading at 1.1593, with the EUR trading marginally lower against the USD from yesterday’s close.

The pair is expected to find support at 1.1578, and a fall through could take it to the next support level of 1.1562. The pair is expected to find its first resistance at 1.1610, and a rise through could take it to the next resistance level of 1.1626.

Going ahead, traders would look forward to the European Commission’s economic growth forecast report and Germany’s trade balance figures for September, both slated to release in a few hours. Later in the day, US initial jobless claims data would be on investors’ radar.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the GBP declined 0.45% against the USD and closed at 1.3114, amid speculations that Britain's International Development Secretary, Priti Patel, would be dismissed, sparked concerns over the future of the Prime Minister, Theresa May's Government.

In the Asian session, at GMT0400, the pair is trading at 1.3127, with the GBP trading 0.1% higher against the USD from yesterday's close.

Overnight data showed that UK's RICS house price balance fell more-than-expected to a level of 1.0% in October, compared to market expectations for a fall to a level of 4.0%. House price balance had recorded a reading of 6.0% in the preceding month.

The pair is expected to find support at 1.3085, and a fall through could take it to the next support level of 1.3044. The pair is expected to find its first resistance at 1.3170, and a rise through could take it to the next resistance level of 1.3214.

In absence of any macroeconomic releases in the UK today, investor sentiment would be governed by global macroeconomic factors.

The currency pair is trading between its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD rose 0.06% against the JPY and closed at 113.87.

In the Asian session, at GMT0400, the pair is trading at 114.00, with the USD trading 0.11% higher against the JPY from yesterday's close.

On the macro front, Japan's machinery orders fell more-than-expected by 8.1% on a monthly basis in September, dropping at its fastest pace in more than two years. Machinery orders had registered a rise of 3.4% in the previous month, while markets had envisaged for a fall of 2.0%.

On the contrary, the nation's trade surplus (BOP basis) widened to ¥852.2 billion in September, higher than market anticipation for a surplus of ¥832.5 billion. The nation had registered a trade surplus of ¥318.7 billion in the previous month.

Meanwhile, according to the Bank of Japan's (BoJ) summary of opinions report, policymakers debated calls from one of its board members to target the longer end of the yield curve at its October meeting. Also, officials showed reluctance to loosen monetary conditions further, despite sluggish inflation.

Early morning data indicated that the nation's Eco-Watchers Survey for the current situation unexpectedly rose to a level of 52.2 in October, confounding market expectations for a fall to a level of 50.8. In the prior month, the index had registered a level of 51.3. Additionally, the nation's Eco-Watchers Survey for the future outlook climbed to a level of 54.9 in October, higher than market expectations of an advance to a level of 51.5. In the prior month, the index had registered a reading of 51.0.

The pair is expected to find support at 113.58, and a fall through could take it to the next support level of 113.15. The pair is expected to find its first resistance at 114.25, and a rise through could take it to the next resistance level of 114.49.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD marginally rose against the CHF and closed at 0.9999.

In the Asian session, at GMT0400, the pair is trading at 0.9999, with the USD trading flat against the CHF from yesterday’s close.

The pair is expected to find support at 0.9985, and a fall through could take it to the next support level of 0.9971. The pair is expected to find its first resistance at 1.0010, and a rise through could take it to the next resistance level of 1.0021.

Ahead in the day, traders would keep a close watch on Switzerland’s unemployment rate data for October.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.3% against the CAD and closed at 1.2731.

The Canadian Dollar gained ground against the USD, following a pair of upbeat Canadian economic reports.

Data showed that Canada's seasonally adjusted housing starts registered an unexpected rise to a level of 222.8K in October, after recording a revised level of 219.3K in the prior month. Markets had anticipated the nation's housing starts to ease to a level of 211.0K. Moreover, the nation's building permits rose 3.8% on a monthly basis in September, advancing for the first time in three months, amid a rise in the non-residential sector. Building permits had registered a revised fall of 5.1% in the previous month, while markets had expected for a gain of 1.0%.

In the Asian session, at GMT0400, the pair is trading at 1.2735, with the USD trading marginally higher against the CAD from yesterday's close.

The pair is expected to find support at 1.2709, and a fall through could take it to the next support level of 1.2683. The pair is expected to find its first resistance at 1.2768, and a rise through could take it to the next resistance level of 1.2801.

Moving ahead, investors would closely monitor Canada's new house price index for September, due to release later in the day.

The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

AUD/USD – 0.7679

Original strategy:

Sold at 0.7720, Target: 0.7550, Stop: 0.7720

Position: - Short at 0.7720
Target:  - 0.7550
Stop:- 0.7720

New strategy :

Hold short entered at 0.7720, Target: 0.7550, Stop: 0.7720

Position: - Short at 0.7720
Target:  - 0.7550
Stop:- 0.7720

Although fell briefly to 0.7627, lack of follow through selling and the subsequent rebound after holding above support at 0.7625 suggest consolidation would be seen, however, as long as resistance at 0.7730 holds, prospect of another decline remains, below said support at 0.7625-27 would extend recent decline from 0.8125 top to 0.7600, then 0.7550, having said that, loss of downward momentum should prevent sharp fall below there and reckon 0.7500 would hold from here, bring rebound later. 

In view of this, we are holding on to our short position entered at 0.7720. Above said resistance at 0.7730 would defer and risk a stronger rebound but only break of previous support at 0.7770 would abort and suggest a temporary low has possibly been formed, bring rebound to 0.7800 and then towards 0.7825-35 later.

On the 4-hour chart, recent upmove from 0.7329 is unfolding as an impulsive rise with wave 3 as well as smaller degree wave (iii) extending, only minor wave v of (iii) has ended at 0.8125, hence bullishness remains for this move to extend headway to 0.8200, then towards 0.8300, however, reckon upside would be limited to 0.8400 and the final wave 5 should falter below 0.8500, bring correction later.

USD/CHF - 0.9988

Most recent candlesticks pattern : N/A

Trend                                    : Up

Tenkan-Sen level                  : 0.9994

Kijun-Sen level                    : 0.9994

Ichimoku cloud top                 : 1.0001

Ichimoku cloud bottom              : 0.9998

Original strategy :

Bought at 0.9950, Target: 1.0050, Stop: 0.9970

Position : - Long at 0.9950

Target :  - 1.0050

Stop : - 0.9970

New strategy  :

Hold long entered at 0.9950, Target: 1.0050, Stop: 0.9970

Position : - Long at 0.9950

Target :  - 1.0050

Stop : - 0.9970

The greenback has remained confined within near term established range and further sideways trading is in store, however, as long as 0.9970-75 holds, bullishness remains for recent rise to resume after consolidation, above indicated resistance at 1.0029 would bring retest of 1.0038, break there would confirm the rise from 0.9421 low has resumed and extend further gain to 1.0050-55, then towards 1.0075-80 but price should falter below 1.0100 chart resistance.

In view of this, we are holding on to our long position entered at 0.9950. Only below said support at 0.9938-48 would abort and signal top is formed instead, risk correction to 0.9920-23 (38.2% Fibonacci retracement of 0.9737-1.0038) but 0.9885-90 (50% Fibonacci retracement) should limit downside, bring another upmove later. 

GBP/USD - 1.3132

Most recent candlesticks pattern   : N/A

Trend                                 : Near term down

Tenkan-Sen level                 : 1.3120

Kijun-Sen level                    : 1.3130

Ichimoku cloud top              : 1.3154

Ichimoku cloud bottom        : 1.3118

Original strategy :

Sold at 1.3175, Target: 1.3045, Stop: 1.3180

Position : - Short at 1.3175

Target :  - 1.3045

Stop : - 1.3180

New strategy  :

Hold short entered at 1.3175, Target: 1.3065, Stop: 1.3175

Position : - Short at 1.3175

Target :  - 1.3065

Stop : - 1.3175

Although the British pound has recovered after falling to 1.3086 yesterday and consolidation with initial upside bias would be seen, reckon the upper Kumo (now at 1.3154) would limit upside and bring another decline later, below said support would add credence to our bearish view that the rebound from 1.3039 has ended at 1.3178, bring further fall to 1.3055-60, then retest of this support. Looking ahead, only a drop below 1.3027 low would confirm early downtrend has resumed for weakness to psychological support at 1.3000, then towards 1.2970-75.  

In view of this, we are holding on to our short position entered at 1.3175. Above 1.3175-80 would risk gain to 1.3200, break there would defer and prolong choppy trading, risk a stronger rebound to 1.3235-40 first.