Skip to content

CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Asia Day Ahead: Wait-and-see in lead-up to Fed’s decision, RBA minutes in focus

Market sentiments remained in its usual wait-and-see ahead of the FOMC meeting, as the VIX headed higher for the second straight day to reflect increased hedging activities.

Federal Reserve Source: Bloomberg

Market Recap

Market sentiments remained in its usual wait-and-see ahead of the Federal Open Market Committee (FOMC) meeting this week, as the VIX headed higher for the second straight day to reflect increased hedging activities while major US indices ended the day flat.

On the other hand, US Treasury yields continued to hover around their multi-year highs, with expectations seemingly leaning towards a potential ‘hawkish pause’ scenario from the Federal Reserve (Fed). This is where the central bank keeps rates on hold at the upcoming meeting, but leaves the door open for one more rate hike by the end of this year as per its previous dot plot. Some pushback against recession risks by policymakers lately may support an upward revision in growth forecasts, but with soft landing hopes having to face off against a potential hawkish recalibration in rate expectations.

The US dollar continues to trade above its 200-day moving average (MA), with the formation of higher highs and higher lows since July this year, as market participants get more accustomed to a high-for-longer rate outlook. That said, the US dollar index is now back to retest a key resistance at the 105.00-105.60 range, which marks its year-to-date high.

Any successful move above this range may support a breakout of its months-long ranging pattern since December 2022, but a potential bearish divergence on relative strength index (RSI) points to some near-term exhaustion for now. The Commodity Futures Trading Commission (CFTC) data revealed that the aggregate net-short positioning for US dollar against other G10 currencies is at its lowest in three months, with any reversal into net-long positioning likely to support further upward bias based on historical instances.

US Dollar Basket Source: IG charts

Asia Open

Asian stocks look set for a downbeat open, with Nikkei -0.76%, ASX -0.32% and KOSPI +0.16% at the time of writing, as Japan markets return from its holiday break. Chinese equities remain in a mixed state yesterday, attempting to weigh between recent improvement in economic data and lingering default risks from Country Garden, which suggests that the property sector risks will likely drag for longer.

The Reserve Bank of Australia (RBA) meeting minutes will be in focus today. With the central bank keeping rates on hold for the third straight month at its September meeting, expectations are largely priced for the trend to continue through the rest of the year, with any confirmation to be sought from the upcoming minutes. At its previous meeting, the central bank retained its tightening bias, but also acknowledged growing economic risks from China and recent slowdown in inflation data, which seem to leave room for more wait-and-see for now.

The AUD/NZD may be on watch, having been trading within an ascending triangle pattern since July this year, with the 1.092 level serving as an immediate resistance to overcome for buyers. Its daily RSI has been attempting to defend the key 50 level since August this year as well, which leaves buyers in some control for now. On the downside, the upward trendline support may be crucial to hold, failing which could pave the way to retest its July/August 2023 lows at the 1.073 level next.

AUD/NZD Mini Source: IG charts

On the watchlist: Silver prices attempting a bounce off support confluence

Silver prices have been attempting to hold up lately amid higher Treasury yields and US dollar strength, as buyers managed to defend the US$22.30 level, where an upward trendline support is in place since September 2022. Higher lows on Moving Average Convergence/Divergence (MACD) on the daily chart may point to some upward momentum in the near term, as prices may potentially eye for a retest of the US$24.50 level, where the upper edge of its ranging pattern resides.

On the weekly chart, a bullish pin bar formation was formed last week, with any positive follow-through on watch this week. Further upside may also validate a bullish crossover on daily MACD, which may potentially draw some technical buyers.

Spot Silver Source: IG charts

Monday: DJIA +0.02%; S&P 500 +0.07%; Nasdaq +0.01%, DAX -1.05%, FTSE -0.76%


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material 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 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research 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.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Act on stock 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
  • Try a risk-free trade
  • 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 advantage while conditions prevail.

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.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets 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.