Asian markets closely watch U.S economy

Daily Analysis - 28/08/2019

The U.S treasury yields going bad as Asia looking for direction


Wednesday Asian Stocks were mixed after an overnight reversal of a strictly followed U.S. Treasury yield curve that went to its worst level in more than ten years. The Shenzhen composite dropped more than 0.2% while Hong Kong’s Hang Seng index moved somewhat higher. Mainland Chinese stocks moved down with the Shanghai composite decreasing more than 0.3% and the Shenzhen component fell 0.39%. In Japan, the Nikkei 225 went higher 0.16% while South Korea’s Kospi added 0.61%. On Wednesday, Investors followed the U.S. Treasury’s range between the 10-year Treasury yield and the 2-year rate that dropped to negative 5 basis points on Tuesday.

Gold falls but still near its top

On Wednesday, the popular yellow metal Gold softened following an increase above 1% in the previous trading session. The reason was the concerns regarding a potential recession. However Gold continued to trade close to a more than six-year top due to expectations that a rate cut by the U.S. central bank and the ongoing trade war will boost once more the precious metal. U.S. gold futures fell 0.4% to $1,545.09 an ounce. Spot gold dropped 0.4% to $1,535.68 per ounce.


Yen still strong

On Wednesday, the Japanese yen stood strong versus its rivals with a reversal of the U.S. yield curve indicating an economic slowdown and boosting concerns. That fact supports the safe-haven Japanese currency in demand. The chief forex strategist at Daiwa Securities Mitsuo Imaizumi said. “It remains to be seen how accurately the U.S. yield curve inversion reflects economic conditions. But it does prompt speculators to reduce dollar positions and increase their bets on the yen,” The yen exchanged at 105.819 per dollar, keeping its profits from the previous day when it raised 0.35%.


Oil going up

On Wednesday, Oil advanced with U.S. crude achieving 1% following an inventory statement revealing that the U.S. stockpiles dropped more than anticipated. That ease concerns regarding economic growth due to the China-U.S. trade war. Brent crude went up by 37 cents, at $59.88 a barrel while West Texas Intermediate crude went up 55 cents, at $55.47 a barrel.


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