ASIA STOCKS: Tech Stocks Boosted by Nvidia, US Rate Outlook Concerns Remain
Nvidia's stronger earnings gave those tech heavy bourses a boost today, bouncing back from several days of caution. For those markets less tech-led the overnight softening of expectations for US rate cuts, the mood was less buoyant and will watch carefully for the key data release tonight on US labour markets. Korea, Japan and Taiwan led the way today with some individual stocks delivering strong daily returns.
- The NIKKEI had it's biggest daily gain since in a month as it jumped +2.8% today as it tries to hold above 49,900
- The KOSPI roared back above 4,000 with gains of almost 3% as SK Hynix jumped +1.2% and Samsung +4.8%
- TSMC in Taiwan led the way with gains of almost 4% as the TAIEX rose +3.1%
- China's major bourses were mostly green today, though returns were much more subdued. The Hang Seng rose just +0.14% and CSI 300 +0.38% whilst Shenzhen fell -0.10%
- SE Asian bourses all were up with Jakarta up +0.8%, Malaysia +0.27% and SE Thai +1.4%
- India's NIFTY 50 is up modestly at the open by +0.19% as new highs are reached of 26,108 as profits for the largest 100 firms grew 12% for the September quarter according to BBG.
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EURUSD TECHS: Trading Above Last Week’s Low
- RES 4: 1.1919 High Sep 17 and a bull trigger
- RES 3: 1.1820 High Sep 23
- RES 2: 1.1775 61.8% retracement of the Sep 17 - Oct 9 bear leg
- RES 1: 1.1730 50.0% retracement of the Sep 17 - Oct 9 bear leg
- PRICE: 1.1635 @ 06:01 BST Oct 21
- SUP 1: 1.1602/1542 Low Oct 9 and the bear trigger
- SUP 2: 1.1516 76.4% retracement of the Aug 1 - Sep 17 bull leg
- SUP 3: 1.1392 Low Aug 1 and bear trigger
- SUP 4: 1.1313 Low May 30
The latest recovery in EURUSD signals a potential reversal and undermines a recent bearish theme, suggesting the corrective cycle between Sep 17 - Oct 9, may be over. Note that moving average studies are in a bull-mode position - for now - highlighting a dominant medium-term uptrend. A resumption of gains would open 1.1775 next, a Fibonacci retracement. Key support and the bear trigger lies at 1.1542, the Oct 9 low.
BUND TECHS: (Z5) Corrective Pullback
- RES 4: 130.99 76.4% retracement of Jun 13 - Sep 25 bear leg (cont)
- RES 3: 130.80 High Jun 13 and key resistance
- RES 2: 130.63 1.500 proj of the Sep 3 - 10 - 25 price swing
- RES 1: 130.59 High Oct 17
- PRICE: 130.00 @ 05:39 BST Oct 21
- SUP 1: 129.68/129.44 Low Oct 15 / High Sep 10
- SUP 2: 129.20 20-day EMA
- SUP 3: 128.86 50-day EMA
- SUP 4: 128.25 Low Oct 7
Bund futures continue to trade below last week’s high, however, a bull cycle remains intact. The impulsive nature of the latest rally and a fresh cycle high on Friday, paves the way for a test of the next key resistance 130.80, the Jun 13 high. Clearance of this level would strengthen the bullish condition. Note that the contract is overbought, a deeper pullback would allow this condition to unwind. Initial key support is 129.20, the 20-day EMA.
GOLD: Gold & Silver Fall As Equities & US Dollar Strengthen, Focus Remains On US
Gold has stabilised today during the APAC session after rising 2.5% on Monday. Prices rose to $4375.38/oz and then fell to $4332.95 and are now down 0.4% to $4340.5. Equities are rallying and the US dollar is slightly stronger (BBDXY +0.1%) but the factors bullion ignored yesterday may have also contributed to the pause in the rally. It is in overbought territory, 2025 Fed easing is already priced in, there is talk that the US government shutdown could end this week and US-China trade tensions appear to have eased.
- Both gold and silver continue to hold well above initial support levels of $4140.8, 15 October low, and $48.736, 20-day EMA, respectively.
- The 1 November deadline for a US-China trade deal remains but President Trump said that the US will “be fine” with China. Economic Council Director Hassett also gave indications that the government shutdown could conclude this week.
- Silver is down 1.1% to $51.87 after falling to $51.607. It is a smaller market than gold and so moves tend to be amplified. It is also signalling that it is overbought.
- Equities are stronger across the region with the Hang Seng up 1.7% and ASX +0.7% but the S&P e-mini is flat. Oil prices are lower with WTI -0.3% to $56.84/bbl. Copper is 0.2% higher.
- Later US October Philly Fed non-manufacturing and September Canadian CPI print. ECB President Lagarde and Board member Lane speak.
