Asia market morning update - awaiting fresh leads

Moderate gains are set in store for Asia markets this Tuesday despite the apparent lack of strong leads, with hopes for benign updates from the event risks into the end of the week being a support.

Can the risk-on atmosphere be sustained?

Wall Street concluded mixed at the start of the week with little to initiate any changes in sentiment. Once again it appears that the week will not quite start until the latter half with the items we are watching. This will perhaps be a good time to ponder over whether the rally we have seen thus far can continue as we watch the likes of the US 500 index trek towards 2018’s all-time high.

As seen from the comprehensive US 500 index’s sectoral performance in the last 1-week, cyclicals had been at the forefront in gains while the defensive lagged with the risk-on mood in markets. This risk-on atmosphere had been underpinned to a large extent with receding growth worries and rising US-China optimism, with the former backed rather strongly of late by the slew of data releases such as last Friday’s jobs report.

Several factors remain up ahead that would likely keep the current rally going in US markets and have positive knock-on effect for Asia markets. Green shoots in the form of data have been ones to alter previous views that the US economy is faring worse than thought while the commencement of the earnings season brings hopes that the market could be receiving better projections even with weak Q1 performance. Likewise in China, which had been a key source of growth woes, further signs of stabilization are expected.

As far as retail contrarian goes, strong net short position on the US 500 remained the case since early this year, one to suggest continued upsides. One caveat in the very near term would be the IMF spring meetings this week that could reintroduce growth concerns with details on the ‘precarious’ global rebound previously outlined by IMF chief Christine Lagarde. Fed minutes expected midweek as well, one to weigh against this.

Asia open

Asia market is look set to start the day with mild gains despite the lack of fresh leads. Some news on trade can be seen passing through on the wires including the US administration proposing tariffs on EU products and the Japanese economy minister said to be planning the first round of trade talks with the US. Risk sentiment however had been little afflicted by the news with USD/JPY still hovering around $111.45 levels. No surprise perhaps given the current US administration’s tendency to position prior to taking action while the US-China trade talks might be occupying all the bandwidth at present. Look further ahead to the leads into the latter half of the week with a rather empty data docket in the day.

On the local Singapore market, the Singapore Index had seen rather measured moves despite the broad gains in the region on Monday with prices meeting resistance. Added caution had likely been the case as well with the Q1 GDP and MAS meeting conclusion due at the end of the week, one that could continue into the week.

Yesterday: S&P 500 +0.10%; DJIA -0.32%; DAX -0.39%; FTSE +0.07%

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.

Please see important Research Disclaimer.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Updated
Change

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

Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
China 300
-
-
-
-

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.