ASIA STOCKS: The KOSPI Leads in Challenging Week
Major bourses put in a strong end to what has been a challenging week, given the happenings in the middle east. The KOSPI is the stand out for the week with solid returns whilst most others are down.
- The Hang Seng is up over +1.1% today for a strong finish to the week, yet down by -1.6% in the last five days. The CSI 300 is up just +0.24% today and down -0.31% for the week. The Shanghai Comp is up just +0.08% and down -0.36% for the week. The Shenzhen Comp is the outlier down -0.28% Friday and down -1.29% for the week.
- In Taiwan, the TAIEX fell -0.39% today and is down -0.70% for the week.
- The KOSPI is up +0.85% today and better by almost 4% for the week on hopes of a new government stimulus.
- The FTSE Malay KLCI is up just +0.22% and down -0.35% for the week.
- The Jakarta Composite is down -0.72% today and -3.4% for the week
- The FTSE Straits Times is up +0.09% today, and down -0.35% for the week whilst the PSEi in the Philippines is flat and down -1.6% for the week.
- The NIFTY 50 in India is up +0.37% todya nad holding on to gains of +0.60% for the week.
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FOREX: FX Wrap - USD Breaking Down
The BBDXY has had a range of 1217.80 - 1222.27 in the Asia-Pac session, it is currently trading around 1218. Ministry of Finance data shows the Chinese government deficit tipped CNY2.6tn in the year to April. This deficit is one of the largest on record and represented a 50% increase year on year. “The BOE may relax post-crisis rules that forced banks to separate retail and investment arms. HSBC, NatWest and Lloyds asked Chancellor Rachel Reeves last month to abolish ring-fencing, saying it made the British banking industry less competitive.”(BBG)
- EUR/USD - Asian range 1.1281 - 1.1340, Asia is currently trading 1.1230.The market is still expected to use dips as a buying opportunity and dips back towards 1.10 should see buyers remerge. Can it find upward momentum again ?
- GBP/USD - Asian range 1.3381 - 1.3435, Asia is currently dealing around 1.3430. Decent demand for GBP all through the Asian session has seen it break above 1.3400. The GBP is back to testing Pivotal Weekly Resistance in the 1.3500 area.
- USD/CNH - Asian range 7.2040 - 7.2198, the USD/CNY fix printed 7.1937. Asia is currently dealing around 7.2050. Sellers should be found on a bounce back towards the 7.2400 area again.
- Cross asset : SPX -0.38%, Gold $3305, US 10-Year 4.50%, BBDXY 1218, Crude oil $63.14
Data/Events : MBA Mortgage applications, Richmond Fed President Tom Barkin , Fed Governor Michelle Bowman to participate in a “Fed Listens” event.
Fig 1: GBP/USD Spot Weekly Chart
Source: MNI - Market News/Bloomberg
BUND TECHS: (M5) Remains Above Support
- RES 4: 132.56 High Feb 28 and a key resistance
- RES 3: 131.72/132.03 High May 7 / High Apr 7 and the bull trigger
- RES 2: 130.86 High May 9 Round number resistance
- RES 1: 130.75 Intraday high
- PRICE: 130.07 @ 05:39 BST May 21
- SUP 1: 129.72/13 Low May 19 / 15 and key short-term support
- SUP 2: 129.02 Low Apr 10
- SUP 3: 128.60 Low Apr 9 and a key support
- SUP 4: 128.19 Low Mar 27
Bund futures are still trading closer to their recent highs. Recent gains undermine a bearish theme and suggest the move down between Apr 22 - May 15, has been a correction. An extension higher would strengthen the reversal and open 130.86 next, the May 9 high. Further out, scope would be seen for a move towards 132.03, the Apr 7 high. Key short-term support has been defined at 129.13, the May 15 low.
ASIA STOCKS: KOSPI and TAIEX Lead
The broader sentiment for Asia's major bourses today was positive with the best performers the KOSPI and the TAIEX. Both market have enjoyed a turnaround in fortune in recent weeks as strong inflows have been enjoyed. Taiwan for example as experienced over $7bn of inflows in May alone and the Korea $750m.
- China's major bourses were all positive today with the CSI 300 leading the way, up +0.68%, the Hang Seng up +0.53%, Shanghai up +0.38% and Shenzhen up a mere +0.09%.
- The KOSPI had a very strong day rising +1.06% to take returns into positive for the week.
- The TAIEX is up +1.03% today yet after strong falls on Monday remains behind for the week.
- The FTSE Bursa Malaysia KLCI is having a weak period at present and is down for a fifth day in a row, by -0.28%.
- The Jakarta Composite's strong period continues up +0.67%, ahead of the Central Bank decision today.
- In Singapore, the FTSE Straits Times fell -0.35% and the PSEi in the Philippines was flat.
- India's NIFTY 50 has had a strong start to the trading day rising +0.53% after three days of losses.
