- Geopolitical tension surrounding Saudi Arabia keeps Asian traders at bay.
- New of initial trade negotiations between the US-China diplomats to start from this week confronts the US arrest of the Chinese official under visa fraud.
- RBA minutes reiterated dovish message but housing data from China/Australia offered intermediate pullbacks.
Asian stocks remain sidelined as risk-off triggered through Saudi Arabian attack extends amid a lack of fresh developments on that front. The risk aversion couldn’t respect the US President Donald Trump’s announcement of reaching an initial trade deal with Japan while also ignoring the fact that Chinese diplomat will travel to the US for initial trade talks during this week. Further, upbeat housing market data from Australia and China could only offer intermediate bounces while failing to counter the overall pessimistic momentum. It should also be noted that Asian traders’ risk aversion ahead of the Fed meeting, on Wednesday, becomes an additional reason for the market’s lack of performance.
Supporting the risk-off could be the dovish monetary policy meeting minutes from the Reserve Bank of Australia (RBA) as well as news of the Chinese official’s arrest in the US on the ground of visa fraud.
With this, the US 10-year treasury yield stretched Monday’s declines forward to 1.830% while MSCI’s index of Asian Pacific shares excluding Japan registers 0.70% loss by the press time. Moving on, China’s HANG SENG prints more than 1.0% loss while Japan’s NIKKEI benefits from the trade news and marks 0.12% gains.
Further, Australia’s ASX 200 and New Zealand’s NZX50 remains mostly positive amid expectations of further monetary easing from the RBA whereas India’s BSE SENSEX loses around 0.6% by the time of writing.
While no major data/event is up for release during the day, except ZEW Economic Survey details for Eurozone and Germany, traders will keep an eye over trade/political headlines for fresh impulse.
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