Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

Asia Day Ahead: Sentiments supported by declining US yields and lower oil prices, but a firm US dollar may temper gains

The bounce in US Treasury yields on Tuesday came short-lived, as bond yields continued their decline overnight and supported strength in rate-sensitive tech.

Oil Source: Bloomberg

Market Recap

The bounce in US Treasury yields on Tuesday came short-lived, as bond yields continued their decline overnight and supported strength in rate-sensitive tech. The US Tech 100 added another 0.90% to recent gains, notching its longest streak of gains in two years. On the other hand, the DJIA and S&P 500 eked out minor gains of 0.17% and 0.28%, while the VIX declined for the seventh straight day.

There was little on the economic calendar yesterday, except a series of Fedspeak which continued to leave the door open for additional hikes on economic resilience. The blowout US third-quarter (3Q) gross domestic product (GDP) was highlighted as part of policymakers’ consideration, but economic data since then has clearly revealed signs of softening. Nevertheless, the ‘bad news is good news’ mantra will likely remain for now, with further moderation in economic conditions to be on close watch to provide more conviction on the inflation fight. Ahead, the Federal Reserve (Fed) Chair Jerome Powell will be due to speak today, with his messaging likely to deviate little from his peers.

Having broken below a head-and-shoulder formation back in October 2023, the SPDR S&P Semiconductor ETF has rebounded around 10% month-to-date. It is currently back to retest the neckline resistance at the 183.30 level, with a bullish crossover formed on daily moving average convergence/divergence (MACD) as a sign of a reversal in momentum to the upside. Overcoming the neckline resistance may potentially support a move towards the 193.50 level next.

SPDR S&P Semiconductor ETF Source: IG charts

Asia Open

Asian stocks look set for a muted open, with Nikkei +0.21%, ASX +0.14% and KOSPI -0.31% at the time of writing. Further decline in US Treasury yields and plunging oil prices overnight may see risk sentiments in the region hold up, but a firm US dollar may temper gains. Chinese equities did not react well to China’s trade data yesterday, resuming their declines in today’s session. A significant downside surprise in exports overshadowed higher-than-expected imports number, which provide a still-mixed outlook for its GDP.

Despite so, the USD/CNH has been stuck in a range over the past months, with its daily relative strength index (RSI) reversing to its lowest level since August this year. The 7.260 level will be the crucial support to hold, where the lower consolidation edge stands alongside its Ichimoku cloud support on the daily chart. Any breakdown of the 7.260 level could potentially unlock fresh selling pressures to retest the 7.127 level over the medium term.

USD/CNH Mini Source: IG charts

On the watchlist: EUR/USD facing key resistance confluence at the 1.076 level

Following a 7% sell-off since July this year, the EUR/USD has been attempting to recover some losses in recent weeks, trading within a near-term rising pattern since last month. A key resistance confluence at the 1.076 level is now in the way, where the upper edge of the Ichimoku cloud on the daily chart coincides with a key Fibonacci level. Buyers may still be in control, with the daily RSI rising above the 50 level for the first time since July 2023, while daily MACD heads above zero. Any formation of a higher low may remain on watch ahead, with any move to reclaim the 1.076 level potentially paving the way to retest the 1.086 level next.

EUR/USD Mini Source: IG charts

Tuesday: DJIA +0.17%; S&P 500 +0.28%; Nasdaq +0.90%, DAX +0.11%, FTSE -0.10%


The information 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 Bank S.A. 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 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. See full non-independent research disclaimer.

Act on share opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

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.