Asia Pacific Market Open – Brexit, Italian Budget, S&P 500, US Dollar, Fed, US China Trade Wars
- Market optimism engulfs financial markets post US Thanksgiving Holiday break
- This also resulted in increased Fed rate hike bets, pausing gains on Wall Street
- Asia stock optimism at risk to US China trade war fears, NZD/USD[1] may decline
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Financial markets initially began this trading week with a dose of ‘risk on’ appetite. This came amidst a reduction in Italian budget concerns[3] and the EU approving UK Prime Minister Theresa May’s Brexit deal. Furthermore, optimistic bets for this week’s G20 showdown between US President Donald Trump and Chinese President Xi Jinping likely led Asia stocks higher Monday[4].
European equities gapped higher as the Euro[5] Stoxx 50 finished the day by 1.13% to the upside. Then, the S&P 500[6] followed suit as it closed 1.55% higher. Wall Street was led higher by the FANG group, with Amazon up by 5.28% following the US Black Friday weekend. Market optimism was also seen in US Treasury yields and resulted in a steepening of the 2019 implied Fed rate path.
As a result, the haven-linked US Dollar[7], which initially fell during the first half of Monday’s session, trimmed its losses and ended cautiously higher. Meanwhile, the anti-risk Japanese Yen[8] paused its descent as gains in US equities were somewhat halted due to increased Fed rate hike bets. With that in mind, we
