ASIA MORNING: The King's Speech

The words "close" and "phase one" were centre-stage during Trump's campaign-style speech to the Economic Club of NY. But it's nothing the market hasn't heard before. Stocks shuffled sideways largely unfazed by Trump's comments which offered nothing significant in terms of timing and location of the highly touted signing ceremony. US-China trade negotiations remain embattled in our view as detailed in SPECIAL REPORT: The US-China Art Of War. S&P 500 Futures grazed 3,100 before a close at 3,090. Markets will likely wait on the indications from the USTR's tariff report on auto parts before deciding on their next big move.
 

The run-up in US and Aussie equities, both of which are a few clicks off all-time highs, puts interesting downside protection plays right in our field of vision. Especially since markets are pricing in best-case outcomes in the US-China complex and natural risk-on hedges look cheap on a risk/reward basis. USDJPY appears glued to 109 levels unable to push through 109.5 - a suggestion that markets potentially aren't fully convinced that equities will stay at these levels. Short USDJPY therefore might be a good value bet to fade the recent optimism.
 

RBNZ makes its decision at 12pm AEDT. As a reminder, we think it's a close call as to whether the RBNZ cut by 25bps or not and like the idea of getting long on a NZDUSD sell-off. See SPECIAL REPORT: RBNZ November Preview. Around the same time we also catch the Aussie Q3 Wage Price Index at 11.30pm AEDT, a window into wage inflation and something the RBA draws a fair bit of attention to when sizing up monetary policy. Forecasts for the y/y print have come in at 2.3%. An AUDNZD test of year highs could eventuate if we see a beat here coupled with an RBNZ cut.