ASIA-PAC MID-SESSION UPDATE: Asia trades subdued after Friday's Wall St losses, EUR slips as German coalition talks collapse

Asia begins the week subdued following the losses on Wall St. last Friday and with focus on political uncertainty after Trump campaigners were subpoenaed and German coalition talks broke down. ASX 200 (-0.2%) and Nikkei 225 (-0.5%) are in the red but with recent strength across commodities helping stem losses in Australia, while Japanese sentiment is dampened by a firmer JPY and a miss on trade data. Hang Seng (-0.2%) and Shanghai Comp. (-0.9%) are also pressured with the mainland underperforming as Shenzhen stocks resume Friday’s sell off and amid reports that China tightened asset management rules to curb risky lending.

In FX markets, EUR weakened after coalition talks collapsed in which the FDP walked away from discussions with German Chancellor Merkel’s CDU/CSU and the Green Party due to unrealistic differences. This failure to reach a ‘Jamaican coalition’ raises prospects of a snap election and has pressured EUR across the board with EUR/USD retreating further below 1.1800, while EUR/GBP gave up the 0.8900 handle. Elsewhere, the remaining of FX markets were subdued with GBP/USD testing 1.3200 to the downside and with the dampened tone containing USD/JPY near 112.00.

Finally, 10yr JGBs are uneventful with prices flat as demand from the dampened risk appetite in the region, is counterbalanced by the absence of a BoJ Rinban announcement.  

20 Nov 2017 - 02:35- ForexImportant- Source: RANsquawk

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