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 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 ensure that you fully understand the risks involved.

Asia market update: Oil prices at fresh four-month low, ASX 200 retracing from cloud resistance

Major US indices remain stuck in their subdued tone, failing to react much to lower Treasury yields brought on by a series of downside surprises in US economic data.

Oil Source: Bloomberg

Market Recap

Major US indices remain stuck in their subdued tone in the lead-up to the weekend break, failing to react much to lower Treasury yields brought on by a series of downside surprises in US economic data. If anything, data on Thursday further highlighted the economic risks as a trade-off to tight monetary policies, with US initial jobless claims rising more than expected for the fourth consecutive week while industrial production contracted at its sharpest pace month-on-month since December 2022.

The softer data may be in line with what policymakers hope to see, serving as validation for dovish expectations lately as rate expectations continue to price for an end to the Federal Reserve’s (Fed) hiking cycle and the first rate cut in May 2024. The US dollar consolidates further after its 1.5% sell-off on Tuesday – a more resilient showing given the dip in Treasury yields but the near-term downward trend remains.

On the other hand, rising economic risks have not been well-received by Brent crude prices, which fell close to 4% overnight to its lowest level since July this year. A retest of its 200-day moving average (MA) was met with a bearish rejection recently, with a head-and-shoulder formation breakdown in early-November this year potentially leaving the pattern completion at the US$72.00 level on watch. A bearish crossover remains presented on its weekly moving average convergence/divergence (MACD), while its weekly relative strength index (RSI) continues to drag further below the 50 level as signs of sellers in control for now.

Oil - Brent crude Source: IG charts

Asia Open

Asian stocks look set to mirror Wall Street with muted moves, with Nikkei +0.05%, ASX -0.21% and KOSPI -0.56% at the time of writing. Softer Treasury yields and a significant dip in oil prices have not worked the way it should, in terms of supporting gains across the region. Chinese equities remain in a weary state, with the Nasdaq Golden Dragon China Index down more than 3% overnight, following a 1.4% earlier decline in the Hang Seng Index (HSI).

Alibaba failed to lift sentiments with its 2Q 2023 results, plunging 9.1% as investors shun at the news that the company was scrapping plans to spin out its cloud computing division as a result of US chip export restrictions. Aside, China’s house prices also contracted for the fourth straight month, which seem to reflect the limited policy success thus far in driving recovery for its property sector, with weak housing demand likely to persist.

The ASX 200 struggled to see any pick-up in today’s session, as a retest of its Ichimoku cloud on the daily chart was met with some resistance lately with a formation of a daily bearish pin bar on Wednesday. A break above a previous downward trendline resistance may still be supportive of a near-term upward trend, but the upper edge of the daily cloud resistance at the 7,100 level will have to be overcome to provide some conviction for the bulls.

Australia 200 Cash Source: IG charts

Thursday: DJIA -0.13%; S&P 500 +0.12%; Nasdaq +0.07%, DAX +0.24%, FTSE -1.01%

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

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. Please see important Research Disclaimer.

Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

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.

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

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

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.