Asia open: what we are watching in markets – TDS

Analysts at TD Securities offered up a market wrap and noted what they are watching in markets.

Key Quotes:

“Markets traded with a modestly upbeat tone on Wednesday despite a reemergence of trade risks after the Fed flagged greater concern over trade policy in its Beige Book and President Trump threatened “tremendous retribution” on German automakers should talks with the EU fail.  

:Both Treasuries and Canadian rates bear-steepened while equities were mixed (SPX: +0.2%, TSX: -0.1%).”

“In FX, Cable (-0.5%) remains under pressure after a miss on UK CPI added to the political headwinds weighing on GBP. EUR (-0.2%) traded lower into the close to end the session in the red while CAD (+0.1%) recovered from intraday lows to see a modest gain.”

“Australian employment, the SARB, and Bank of Indonesia will be closely watched on Thursday.”

What we are watching:  

“GBP has come under newfound pressure following the Trade Bill vote and weaker CPI.  Attention shifts to further fallout and whether the break down through 1.3050 in cable can be sustained. If so, a new lower trading range is likely to prevail with 1.2750 the next major support level. EURGBP upside also looks like it may have decent legs from here.”

“Powell’s second day of testimony did not materially alter market expectations, with risk sentiment improving further and Treasuries bear steepening modestly. With little for investors to focus on, look for rates to drift ahead of the weekend.”