ASIA STOCKS: Regional Bourses Mixed; China Lags Tech Rally Again
Whilst US indexes finished modestly up overnight, it wasn't enough to spur regional investor appetite with a mixed day across the region for major bourses. With most key AI tech stocks providing gains, tech heavy bourses were up again today with the NIKKEI and KOSPI leading. BITCOIN has recovered all of Monday's losses following news that China is cracking down on crypto speculators and that helped feed into better risk sentiment in general. China's major regional bourses are down and continue to lag the tech led boom elsewhere, with some market commentators suggesting that Chinese AI / tech names remain undervalued relatively to SK and JN names.
- The NIKKEI is up +1.5% to break above the 50,000 level to be 4.5% below the October high whilst the KOSPI was up again, by 1.2% today to break above the 4,000 level and close in on the early November high of 4,221
- China's major bourses are all lagging, with the Hang Seng the worst performer, down -0.95%. With Shanghai Comp and the CSI 300 doing little but trending weaker, it was down to Shenzhen to follow lower, dropping -0.35%
- The TAIEX is up +0.60% with TSMC up over 1% as US President Trump signs bill to deepen US-Taiwan ties .
- Having closed at a new high of 26,215 on November 27, the NIFTY 50 has fallen moderately each day since and is down -0.4% today at the open ahead of this week's RBI decision and the currency under pressure again.
- Jakarta and KL are moving in opposite directions with the JCI up +0.25% whilst the FTSE Malay KLCI is down -0.44% taking out some of its gains to start December.
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FOREX: Asia-Pac FX - BBDXY Moves Into Pivotal Resistance
The BBDXY has had a range of 1220.25 - 1221.11 in the Asia-Pac session; it is currently trading around 1220, -0.05%. The USD built on its gains from last week into the month-end. The 1220-30 area remains tough resistance, only a sustained close back above 1230 would start to challenge the conviction of the longer-term USD shorts. Risk/Reward does still favour fading this moving initially but the price action is starting to look more constructive as higher lows are being made on the Daily chart through October. A sustained move back above 1230 would potentially signal a medium term low is in place and a deeper pullback is on the cards.
- EUR/USD - Asian range 1.1522 - 1.1538, Asia is currently trading 1.1530. The pair has moved back toward its support just above 1.1500. A break under this support could signal a deeper correction, first target 1.1400 and then the 1.1100/1.1200 area.
- GBP/USD - Asian range 1.3130 - 1.3142, Asia is currently dealing around 1.3140. The pair looks to be building some downward momentum. This 1.3100/1.3150 area has proved to be supportive on more than 1 occasion this year so some work around this level could be expected. I continue to favor fading rallies though as GBP attempts to put in a medium term top.
- USD/CNH - Asian range 7.1178 - 7.1249, the USD/CNY fix printed at 7.0867, Asia is currently dealing around 7.1190. The support below 7.1000 looks to be pretty solid for now as USD/Asia moves in sympathy with a higher USD/JPY. The range of 7.08-7.16 looks set to continue for now.
- Cross asset : SPX +0.15%, Gold $4007, US 10-Year 4.0775%, BBDXY 1220, Crude Oil $61.18
- Data/Events : Italy HCOB Italy Manufacturing PMI/Budget Balance, Germany HCOB Germany Manufacturing PMI, EZ HCOB Eurozone Manufacturing PMI, France HCOB France Manufacturing PMI, Spain HCOB Spain Manufacturing PMI
Fig 1: BBDXY Spot Weekly Chart
Source: MNI - Market News/Bloomberg Finance L.P
RBA: MNI RBA Preview-November 2025: CPI Outlook Key To Rates
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- The Q3 trimmed mean print at 3.0% y/y up from 2.7% and at the top of the 2-3% target band was a “material miss” for the RBA and meant that the Board is now highly likely to leave rates at 3.6% at its 4 November decision.
- The Board is likely to remain highly data dependent and cautious given inflation’s renewed shift higher and the emerging domestic recovery but easing labour market conditions.
- Updated staff forecasts will be released and the underlying inflation path is likely to be the focus to see how far out the return to the 2.5% band mid-point has been pushed out.
- The Board will need to see inflation resuming its trend lower towards 2.5% before it is likely to consider cutting rates again. Thus, rates are probably on hold in December and the Q4 CPI data on 28 January will be a key input into the 3 February decision.
NZD: Asia-Pac - NZD/USD Finds Support Towards 0.5700
The NZD/USD had a range of 0.5713 - 0.5727 in the Asia-Pac session, going into the London open trading around 0.5725, +0.05%. US yields retraced on Friday night but the USD continues to grind higher challenging levels last seen in July/August. The NZD found some demand back toward 0.5700 and consolidated in a tight range over month-end. While price remains below the 0.5800/50 area I suspect rallies continue to be faded looking for a potential move back towards the 0.5500/0.5600 area. NZD continues to stand out as a short against a resurgent USD but it is worth noting that because of the size of the market the market can very quickly become all positioned the same way, so I think the USD will need to build on its challenge higher for the NZD to test those lows.
- Options : Closest significant option expiries for NY cut, based on DTCC data: none. Upcoming Close Strikes : 0.5650(NZD1.1b Nov 5), 0.5675(NZD1b Nov 5), 0.5750(NZD604m Nov 5) - BBG
- AUD/NZD range for the session has been 1.1423 - 1.1453, currently trading around 1.1445. The Cross has bounced hard after finding solid demand back toward 1.1300. This 1.1400/1.1500 area remains tough resistance but the price action suggests the market wants to test it. Above 1.15/16 and the markets focus will start to turn toward 1.2000 and beyond.
Fig 1: AUD/NZD Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
