Asia markets adrift awaiting central banks

Markets remain in waiting for the European Central Bank (ECB) meeting this week, waffling with little fresh leads to guide prices.

Risk-on atmosphere prevails

Wall Street had concluded the Tuesday session little changed, with the comprehensive S&P 500 index still finding the cyclical-defensive divide shining through. The energy, industrials and materials sectors notably led gains, reflecting the risk-on atmosphere prevailing in North American markets. This was despite the mixed signals coming through from the July JOLTS report whereby jobs opening were shown to have declined more than the consensus to 7.22 million, a new 5-month low to continue the downtrend. Hiring, however, were reported to be resilient, in line with the labour market updates from last week. In turn, the US dollar index held largely steady with little so much of a whisker of movement. As for the S&P 500 index, the near-neutral movement find prices still eyeing the 3000 level.

One piece of news that was seen to move prices amid the stale environment had been President Donald Trump’s firing of his national security adviser John Bolton. Brent crude prices notably edged lower on the announcement given the hard-line stance from the former security adviser particularly on topics such as in relation to Iran. The reversal of these gains into Asia hours, however, had numbed any impact on commodity currencies among others. That being said, the short-term uptrend for crude oil prices will be one to watch with the OPEC monthly meeting and also the Joint Ministerial Monitoring Committee (JMMC) thereafter. As it is, the driver for crude oil prices remains one of a demand story and further upsides may require the likes of sustained improvement in geopolitical issues.

Source: IG Charts

USD/JPY at six-week high

While the FX market remains broadly little moved going into the Wednesday session, USD/JPY had been one to continue reflecting the improvement in market sentiment. Moving up to a six-week high, USD/JPY was last seen oscillating at $107.50 levels, departing from the earlier downtrend. Built on the back of the recent spate of turns in geopolitical sentiment, this had seen to the short-term rally likewise for this currency pair. While the hopes for upcoming support for the market from central banks including the likes of the ECB and Bank of Japan itself continue to carry USD/JPY prices, it would nevertheless warrant some caution considering the potential for sharp reversals should there be any disappointments coming up. The volatility with this pair remains.

Source: IG Charts

Yesterday: S&P 500 +0.03%; DJIA +0.28%; DAX +0.35%; FTSE +0.44%

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Take a position on indices

Deal on the world’s major stock indices today.

  • Trade the lowest Wall Street spreads on the market
  • 1-point spread on the FTSE 100 and Germany 30
  • The only provider to offer 24-hour pricing

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. All share prices are delayed by at least 20 minutes. Prices are indicative only.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.