ASIA-PAC MARKET UPDATE: Asia eked modest gains amid quiet trade; NZD pressured by Ardern comments

Asia equity markets traded with modest gains in what was a quiet and rangebound trading session amid a lack of drivers. Nonetheless, the regional bourses have shrugged off the weak performance by their US counterparts which pulled back from record levels, with ASX 200 (Unch.) indecisive and Nikkei 225 (+0.2%) mildly positive after the index recovered from early weakness triggered by a firmer JPY to print fresh 21-year highs. Hang Seng (Unch.) and Shanghai Comp. (+0.1%) just about kept afloat as another substantial liquidity operation by the PBoC only provided minimal support heading to the close of the National Congress. Finally, 10yr JGBs were flat with demand subdued by a modest risk tone and after an uneventful enhanced liquidity auction for super-long JGBs.

In FX markets, NZD underperformed on uncertainty regarding the future of the RBNZ after comments from incoming PM Ardern who stated they will review and reform the Reserve Bank Act, while she also noted they have an agreement to ban purchases of existing homes by foreign buyers. Elsewhere, JPY remained firm after the safe-haven flows seen during US trade and other major pairs were relatively uneventful amid a lack of data releases, although the greenback slightly weakened which underpinned its counterpart across the pond in which GBP/USD reclaimed the 1.3200 handle to the upside.

24 Oct 2017 - 05:47- Fixed IncomeImportant- Source: RANsquawk

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