ASIA-PAC MID-SESSION UPDATE: Asia somewhat failed to sustain momentum from another record close on Wall St, with China cautious amidst earning season and heading into the 19th National Congress

Asia equity markets trade mixed as the momentum from their counterparts on Wall St, where all major indices edged fresh record levels once again, gradually petered out throughout Asia trade. The positive lead provided an early bid tone in ASX 200 (+0.8%) which was also led by materials names as Rio Tinto rose to its highest in around 6 years on strong Q3 iron ore shipments, while Nikkei 225 (Unch) failed to sustain opening gains as participants took heed of a strengthening JPY and booked profits. Elsewhere, Hang Seng (Unch) and Shanghai Comp. (-0.3%) are subdued and ignored a substantial liquidity operation by the PBoC, with participants tentative in the midst of earnings season and ahead of China’s 19th National Congress.

In FX markets, USD extended on the gains against its major counterparts with EUR/USD slipping further away from the 1.1800 handle where it had earlier met resistance, while GBP/USD failed to nurse yesterday’s Brexit-impasse related weakness. Antipodeans were in focus with NZD/USD initially lifted by stronger than expected Q3 CPI, before the pair gave up gains and then some amid USD strength, ongoing political uncertainty and with analysts suggesting the RBNZ sectoral factor core inflation remained subdued. Elsewhere, AUD was also pressured after the RBA minutes suggested the central bank remained steadfast and stated that rate hikes abroad do not have any mechanical implications for Australian rates.

Finally, 10yr JGBs are subdued amid a somewhat indecisive risk tone in Japan and with participants sidelined ahead of today’s 20yr bond auction.

17 Oct 2017 - 03:35- Important- Source: RANsquawk

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