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.
The day ahead could however see a multitude of updates on economic conditions in Asia that could provide more diverse leads for the region.
North Korean, Syrian tensions and the upcoming French election appear to be topping the list of reasons to seek the flight to safety at the moment. The CBOE volatility index, VIX, a fear gauge for markets, displayed the rising concerns in markets in a meaningful manner, shooting up to the highest level since the US Presidential election in November 2016.
Prices touched a high of 15.88 overnight. One would suspect that there remain room on the upside as we step up towards the first round of the French elections on 23 April 2017 and as geopolitical tensions appear to only be heating up. Against this backdrop, demand had been ablaze for safe havens, allowing the price of gold to climb significantly above its 200 day moving average (DMA). When last checked at 8.30am Singapore time, prices had been waffling at $1275 levels. Safe haven trade may be the one thing that the market fear missing out at the moment.
I may not have more to say about the movement on Wall Street with the magnitude of changes hardly raising any eyebrows. A broad state of consolidation for prices and moderate volume of trade, despite the risk-off atmosphere, points to the fact that anticipation remains reserved for the upcoming earnings release.
Notably, the energy sector had not been too impressed by the uptick in crude oil prices, though for prices, Tuesday’s API report had been godsend. WTI futures had made its way up above $53.50 per barrel (bbl) this morning, following the API report of a 1.3 million drawdown in crude inventories. This comes close to the consensus of a 1.5 million decline pencilled for the official report, and only supports the broad rally in prices.
Early movers in the Asia Pacific region appear to be displaying mixed movements at the moment with Hong Kong and Singapore bourses expected to trend alongside the South Korean KOSPI 200 to pick up moderately. Japan’s Nikkei 225 had expectedly been facing the grind with the USD/JPY slide, which may worsen with USD/JPY down below the psychological level at $110. Expect the updates from China including March’s price inflation to be a key influence on prices. Singapore’s February retail sales and India’s inflation and industrial production updates will also be due in the day.
Yesterday: S&P 500 -0.14%; DJIA -0.03%; DAX -0.50%; FTSE +0.23%