Political noise returns

Sentiment across the region looks set to take another hit with this latest political development.

Yen strengthens on heightened risk sentiment

We are back to paying attention to political concerns with US speaker of House Nancy Pelosi opening a formal impeachment inquiry with respect to President Donald Trump. While the President did aid Wall Street with the retracing of some losses by specifying that he would release the transcript on the call with the Ukrainian President, which is the matter in question, the likes of USD/JPY (大口） remained relatively suppressed. Prices were seen touching a 2-week low overnight, trading just above the $107 handle into Wednesday morning. As seen from the charts, a short-term downtrend had once again formed awaiting a test of the next support at $106.74. It would be difficult for the market to ascertain how long this matter will drag and the concurrent impact upon US-China trade, which is the bigger worry at present. Thus, it is likely that we could see the downward pressure on USD/JPY continue.

As it is, the likes of the US 10-year yields had been a clear indication of the market concern, falling to a 2-week low, and dragging on the greenback alongside the latest September consumer confidence disappointment. US conference board consumer confidence had dipped to a 3-month low to 125.1 against the 133.5 consensus, one to add to the series of worrying indications this week including the Germany manufacturing PMI plunge.

Asia open

Ahead of the string of Asia Pacific central bank meetings this week, it looks like the volume of geopolitical concerns had once again been tuned up, one to watch as we ponder in the likes of Bank of Thailand’s potential rate cut today. As it is, early movers including the likes of the Nikkei 225 and the ASX 200 had both erased 0.70% in the morning, awaiting the rest to fall in line with the declines. Reserve Bank of New Zealand likewise announces their rate decision today with no changes expected after the last surprise slashing of rates. As told above, Bank of Thailand will be one worth watching. Despite the consensus for no change, deteriorating economic data performance and the pressure from regional and advanced economies central banks could see the Thai central bank follow suit with another move here, one for USD/THB.

Looking at the likes of the local STI, prices had likewise been on a short-term downtrend that could see to more selling pressure building with the break at the 3149.4 support.

Yesterday: S&P 500 -0.84%; DJIA -0.53%; DAX -0.29%; FTSE -0.47%