Asian Market Updatec - Jan 5, 2007

Discussion in 'Trading' started by TradeTheNews, Jan 4, 2007.

  1. TradeTheNews

    TradeTheNews ET Sponsor

    Japanese bond prices rally on expectations that US nonfarm payrolls will be softer than expected, eroding demand for Japanese exports

    The Nikkei 225 is down by more than 1.80% as exporters are under pressure due to the stronger JPY and fears that the US nonfarm payrolls data will be worse than expected, eroding demand for Japanese exports. The South Korean Kospi opened higher, tracking gains in US tech stocks, but later gave back gains and declined to a 3week lows after the financial regulator said it would tighten mortgage restrictions. The ASX 200 opened in positive territory, but later declined as falling gold and copper prices continue to put pressure on mining shares. The ASX 200 tested the 5600 level, but could not hold above this level. Taiwanese equities opened higher following gains in the Nasdaq, boosting the Taiwanese dollar, but later reversed to decline, tracking losses in other Asian equities. Thai equities opened down by 2.1% and the Thai baht was pressured on renewed coup fears.

    Forex: The USD was firmer during Asian trading despite Japanese bond traders betting that the nonfarm payrolls report will be weaker than expected. EUR/JPY saw a great deal of volatility, as the Euro traded down by 1 yen from the day's high. The increasing volatility and expectations of a Jan 18 BoJ rate hike saw the NZD/JPY, GBP/JPY and AUD/JPY carry trade pairs trade to the downside. The Korean Won traded near session lows against the USD and JPY as traders reacted to the government measures aimed at slowing the appreciation of the Won.

    During the US session, Japan's Economic Minister Ota said that economic imbalances should be dealt with by using structural reforms and not by currency manipulation. Ota is visiting the US during this week and is expected to meet with the Fed's Bernanke. Japan' Finance Minister Omi tried to downplay expectations of a January rate hike from the BoJ.

    ABC News reported that N. Korea may be preparing for another nuclear tests, but financial markets largely ignored the news.

    Commodities: Shanghai Copper opened down by its daily limit for the second consecutive session, following losses on the London Metal's Exchange. Crude oil rebounded in Asian trading, following a second consecutive sell- off during the US session on forecasts of unseasonably warm weather in the US's Northeast region
  2. Mvic


    Thanks for the info and for sponsoring ET.