ASIA MORNING: ASX Reaches For The Summit

*ASX 200 reaches for all-time highs
*ASX 200 implied vol sustains at lower bound
*US data quells concerns about slowing consumer narrative
*GBP jumps twice on Guardian journo's prediction and YouGov MRP polls
*Antipodean confidence and capex data up ahead

Will the ASX get there?

ASX 200 looks set for a 22pt gain at the open following a modest rise in December Futures overnight. This would put it close to all-time highs of 6,875 made in early Q3 2019. A strong gain at the open sees the ASX 200 only 6pts off the summit, and could incentivise breakout traders targeting a momentum move beyond 7,000.

Higher RBA rate cut expectations coupled with the most recent state of US-China trade hopes for a phase 1 deal sees equity sentiment supported and doesn't look to dissipate anytime soon. President Trump mentioned that US and China were in the "final throes" of a deal. Both sides appear able to maintain a near-term market positive narrative but we still raise question marks around the timing, translation and economic substance of a phase 1 deal before close of the year. 

ASX 200 VIX near all-time lows

A fear gauge, as captured by bets on the ASX 200 VIX, is trading near the lower bound of a multi-year range (red circle). Less fear (or implied volatility) tends to be associated with moves higher in equities. Should the ASX 200 VIX persist at these subdued levels, price action in the Aussie index is likely to remain supported. 
ASX 200 (green, RHS). ASX 200 VIX (purple, LHS). 

Decent US data suggests growth still there

A deluge of US data hit the wires overnight. Overall, it was uniformly positive and calmed concerns about the potential for a slowing consumer narrative. The 2nd estimate of Q3 GDP printed above expectations 2.1% vs 1.9%e. Oct. Durable Goods Orders came in stronger, 0.6% vs -0.8%e. Personal spending fell in line with forecasts (0.3%). The Fed Beige Book suggested consumer spending seems to be holding. US Dollar Index has outperformed against G10 as a result having gained +0.16%. S&P 500 also benefitted finishing up +0.4% to trade near record highs. 

UK polling making an impact

GBPUSD has breached 1.29 levels having become increasingly sensitive to polling news as we flagged leading into the UK election. A Guardian reporter noted ahead of the YouGov MRP poll that "it's a significant Tory majority as things stand" but "Labour's national share has gone up by a few points in the last week". The YouGov MRP Poll released at 10pm LT has also predicted Conservatives to take out 359 seats, a majority government in the House of Commons. This bodes well for our scenario 1 in our SPECIAL REPORT: Ahead Of The UK Election with GBPUSD is pushing 1.294 at time of writing. 

Aussie and NZ data points worth a watch

AUDUSD price action has been range-bound since RBA Lowe's market-moving QE speech on Tuesday suggested QE was not as close as we all thought. Initially having moved higher towards 0.679 on Lowe's somewhat hawkish tone, the pair was then subsequently pulled back into 0.677 support driven by Westpac expectations for two more rate cuts by June 2020. That news shifted the OIS curve down with market pricing reflecting a greater likelihood that the RBA close in on an effective lower interest rate bound of 0.25% (mentioned in Lowe's speech).

Up ahead, Antipodeans traders catch Nov. NZ Business Confidence numbers at 11am AEDT, as well as, several Q3 capex data points at 11.30am AEDT. Further improvement in NZ Business Confidence from all-time lows in Sep should help support NZDUSD. With QE talk fresh in the mind of AUDUSD traders, we're likely to see Q3 Aussie capex forecast to print -0.1% play second fiddle in proceedings.