 US and China agreed not to escalate trade war after meeting between Trump and Xi. A cease-fire agreement was reached. Even though it's just for 90 days, Asian markets responded positively to the development with all major indices recording solid gains. DOW futures are also pointing to a day of 2% gain for now. In the currency markets, Australian Dollar is the biggest beneficiary and have a strong head start to a busy week. Canadian Dollar and New Zealand Dollar follow as the next strongest. Yen is naturally the weakest one on return of risk appetite. Dollar is the second worst performing, and will need some support from this week's data including NFP, as well as Powell's testimony to reversed weakness. Technically, AUD/USD finally shows some conviction by gapping up through 0.7314 key resistance. That should seal the case of medium term bullish reversal and next target is 0.7446 fibonacci level. USD/CAD's steep fall today also add credence to the case of rejection of 1.3385 resistance Immediate focus is back on 1.3187 support for confirming near term reversal. Elsewhere, EUR/USD, GBP/USD, USD/CHF, USD/JPY, EUR/GBP, EUR/JPY and GBP/JPY are all staying in familiar range only. In other markets, Nikkei closed up 1.0% or 223.7 pts at 22574.76. Hong Kong HSI is up 2.46% at the time of writing. China Shanghai SSE is up 2.57%. Singapore Strait Times is up 2.26%. 10 year JGB yield is down -0.0049 at 0.086, below 0.09 handle. WTI crude oil rebound strongly and is now at 53.3. Gold is attempting to recover on Dollar weakness and is pressing 1230. |
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