ASIA WRAP: Aussie Banks Capped ASX Gains


*Aussie banks finding it tough
*Aussie retail sales missed expectations
*Equity markets still up on US-China trade hopes



FX:

  • Negligible headlines in FX through Asia with US-China trade hopes supporting risk.
  • AUDUSD +0.04%. Aussie Retail Sales m/m missed expectations 0.2%; est. 0.5%; prior 0.4%. 
  • NZDUSD +0.36% was high beta on US-China trade. 
  • USDJPY +0.05% didn't buy in to US-China trade hopes and still remains steadfast at 108.22.
  • US Dollar Index -0.03% was little changed with EURUSD flat and GBPUSD +0.02%.
  • USDZAR -1.3% was high beta in Asia trading with markets appearing relieved that a ratings downgrade by Moodys eschewed junk status and only went as low as negative.
  • Other EM FX pairs were broadly USD negative. 

Equities:

  • Equities finished up in Asia driven by broad US-China trade hopes. Some more than others. 
  • ASX Cash +0.27% spiked at the open but was faded throughout the day on the weak outlook for Aussie bank stocks, who make up a significant proportion of the index. Westpac (WBC.AX) was front page news with profits significantly lower, its dividend cut and a A$2.5bn cap raising announced. 
  • ASX 200 Futures +0.166%. 
  • S&P 500 Futures +0.22% has slowed near all-time highs. 
  • Nikkei Futures +0.39%.
  • CSI 300 Futures +0.44%. 
  • HSI 50 Futures +1.16% despite claims that protests will heat up after two critical weekend clashes. 

Fixed Income:

  • Yields pointed up through the session as bonds sold. 
  • AUS 10y yields +3bps. 
  • NZ 10y yields opened +5bps higher. 

Commodities:

  • Brent Crude Futures -0.5% were slightly softer on some cautious trading ahead of manufacturing data.
  • Gold spot -0.16% was marginally lower given US-China positivity. The lull in negative US-China headlines over the last month has seen Gold stay within a tight range.



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