Asian Stocks Gain As Risk Appetite Holds Up, US Stock Open Eyed

Talking Points:

  • China posted its first Dollar-terms trade deficit for over a year
  • Singapore tightened monetary policy for the first time in six
  • Asian stocks got a strong US tailwind

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Asian Stocks were mostly higher Friday as risk appetite continued to gain and markets looked ahead with confidence to the US corporate earnings season.

Worries about immediate Western military intervention in Syria seemed to have calmed down somewhat too, and there was no further bad news from the front-lines of the trade spat between Washington and Beijing.

Indeed, Chinese trade data posted their first US-Dollar terms trade deficit for over year, although the Yuan-terms figures remained well in surplus. Imports and exports both rose, but the latter a little less than expected.

The Nikkei 225 ended up 0.55% with the ASX 200 in the green by 0.2%. The only notable laggard was the Shanghai Composite which was lower by 0.3% as its close loomed.

The US Dollar was broadly firmer as US yields climbed, although the Australian and New Zealand Dollars were higher too. NZD/USD has climbed back to highs last see in mid-February, and looks set to top the closing high seen back then. It comes in at 0.7388.

The Singapore Dollar made gains after the Monetary Authority of Singapore effectively tightened policy for the first time in six years. MAS said it would alter the slope of the Singapore Dollar’s Nominal Effective Exchange Rate to allow for ‘modest and gradual’ appreciation.

Gold prices slipped back as investors cleaved to riskier assets, while Crude oil prices also backtracked on the perceived easing of Syrian tensions. Oil looks set for a very solid weekly gain nevertheless.

There’s not a huge amount of life left in this week’s economic calendar but Canadian existing-home sales and the University of Michigan’s venerable US consumer confidence snapshot should grab some investor attention. Focus will be on US stock futures, following Wall Street’s strong session Thursday.

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— Written by David Cottle, DailyFX Research

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