ASIA WRAP: Risk Assets Bearish On Impeachment Risks


*Impeachment enquiry increases political uncertainty
*Asian indices slump on weak risk sentiment
*Afterpay surges 13% on GS re-rating



FX:

  • FX majors broadly favoured a stronger USD in Asia after overnight Trump developments - impeachment inquiry, weak US confidence numbers and strong UN remarks - weighed on global risk sentiment.
  • NZDUSD caught a hawkish reaction as the RBNZ kept rates unchanged and left November guidance open. It traded as high as 0.635, +40pips, but has since retreated to 0.632 finishing +0.05% on the day. 
  • AUDUSD, EURUSD and GBPUSD were all dragged lower on overnight risk sentiment. 
  • USDJPY pared some of last night's sell-off (+0.3%) and is testing 107.4 resistance for the third time today. 
  • USD EMs traded moderately stronger on Trump headlines with USDZAR the outperformer (+0.4%)
  • Positive headlines that leant on China buying US farm products was also transitory with USDCNH edging higher +0.20%. 

Equities:

  • ASX 200 slumped -0.6% to finish at 6,710 alongside broad losses in other Asian indices and index futures. Despite lower risk sentiment, ASX tech darling Afterpay (APT.AX) soared as much as 15% after GS re-rated the stock higher.  
  • Nikkei Futures was lower -0.6% as USDJPY gained. 
  • CSI 300 was down -0.8% while Hang Seng Futures tumbled -1.3%. Trump's stern UN remarks wouldn't have helped. 
  • S&P 500 Futures ended the session largely flat after tumbling 30 points overnight. 

Fixed Income:

  • AUS 10y yields ticked lower a couple of bps as bonds saw risk-off flows. 
  • US 10y yields sit at 1.65 having consolidated last night's -6bps move. 

Commodities:

  • Commodities softened on a stronger USD. 
  • Brent Crude finished -1.1%. 
  • Gold and Silver crept lower -0.2% and -0.15% respectively but remain supported by Trump impeachment risks. 



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