The attention overnight had been with the US dollar. The lack of news and events have allowed economic indicators to take the lead in prices though thin markets have kept reactions mild. US Q3 GDP was revised higher than expected to 3.5% quarter-on-quarter (QoQ) in the third reading from 3.2% QoQ earlier and the initial 2.8% QoQ, marking the highest growth rate in two years. This had briefly pushed up the USD index before prices see-sawed on the release of a series of data including durable goods orders, personal income and spending data. The USD index had entered Friday with a net higher position, flat lining around 103.10 when last checked (08:30am Singapore time).
Asian currencies are expected to remain pressured in the day with KRW dipping to the lowest level against the USD since March. When compared to levels since the US elections, KRW had shed approximately 5.7%, making it the third worst hit Asian currency in terms of percentage following the safe haven JPY and MYR. Indeed with the domestic growth concerns and political unrest, it is no surprise to find the won up on the list. Sustained concern over capital outflow in the region could keep the dark clouds over Asian markets for an extended period, until reassessment is due in the New Year.
Meanwhile on equities, traders have been closing their position into the end of the year and have brought down most of the sectors on the S&P 500 index with the exception of energy and defensives – telecommunications and utilities. Asian indices could remain depressed into the end of the year and thin volumes have even seen the ASX revert to a moderate red this morning after touching fresh highs since August 2015 from the Santa rally.
The final day of the week sees Singapore’s November inflation data and industrial production from both Singapore and Taiwan. The market is expecting improvements for the set of the data from the previous month.
Yesterday: S&P 500 -0.19%; DJIA -0.12%; DAX -0.11%; FTSE +0.32%