China's Aggressive Rate Cut Supports Asian Stock Markets

Daily Forex Fundamentals | Written by AC-Markets | Nov 27 08 09:27 GMT |

Market Brief The Usd was range bound in the Asian session, as tentative optimism has swept over the markets. The US equity markets have recorded its 4th straight increase, the Fed pledges to purchase agency debt and MBS, the EU has moved in with eur200bn stimulus package and the PBoC cut rates by 108bp yesterday, all help steady investors' confidence.. China's aggressive rate cuts clearly has helped sentiment, but markets are cautiously monitoring the terrorist situation in India .While it's to early to say the downside risk to the global economy has been neutralized, we are cautiously optimistic. The EurUsd traded between 1.2938 to 1.2870, while UsdJpy slipped from 95.96 to 95.01. Asian regional indexes are currently higher and European futures are pointing to a higher open. US markets are closed for the Thanksgiving Holiday. Commodities are moderately higher, with crude wti trading at $52.90bll, while spot gold is trading at $513.26oz. Volatility continued to decline with the VIX down to 54.92. In New Zealand, November's National Bank Business Outlook survey highlighted the dreadful growth expectations from -11..4 to -14.1. The inability of the survey to rebound from a collapse in October, when financial markets were in a phase of significant distress, suggest the domestic economy is indeed in a grim space. In addition, the trade deficit of $942m continues to deteriorate and the outlook is bleak, considering the downside risk to imports due to domestic weakness and exports due to the global recession. Australia's data didn't fair much better. While private sector Capex increased 0.6% as expected, the underlying quality of growth was very weak. Capex on machinery and equipment printed its largest drop since 2006, and it is this portion of the report that typically points most directly to GDP changes (next week). With a light calender in Europe and markets closed in the US, we expect trading to be subdued ACM FOREX Disclaimer: This report has been prepared by AC Markets (thereof ACM) and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Salesperson or Traders of ACM at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.