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Asian Market Update – Thursday: Asian Markets Brush Off Trump Threats of Shutting Down US Government, Pulling From NAFTA

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The Big Question: Have Asian markets gotten used to Trump comments that would normally lead to market crash?

Also read: Trump Talks Up Border Wall as Congress Eyes Sept. 30 Budget Deadline

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Major equity markets in the Asia Pacific on Thursday brushed off a speech by US President Donald Trump that is full of risks that investors tend to avoid from a government closure in the US to withdrawal from a major trade deal.

Most major indexes in Asia Pacific were up in early trading, while the stock markets in Tokyo and Shanghai were down just slightly.

The Hong Kong Hang Seng Index edged up 0.37 percent to 27,485.87, though the gain was trimmed down from earlier in the morning when the index was slightly above the 27,600 levels.

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The Hong Kong Stock Exchange resumed trading on Thursday, after it was suspended on Wednesday due to a severe typhoon. There has been no reports so far as to how the halt impacted the market, but the gain on Thursday suggest investors were happy back at it.

In South Korea, the KOSPI Index was up 0.41 percent at 2,376.06. The gain came after the rogue leader in North Korea ordered on Wednesday its nuclear forces get ready for war any time.

Down under, the ASX 200 gained a modest 0.07 percent to 5,741 before midday.

In Japan, the Nikkei dropped about 0.35 percent to 19,368 before midday after it shot up higher in early hours of the Asian trading session.

In China, the Shanghai Composite Index was down 0.17 percent to 3,282.

The mixed performance, with most major Asian indexes up, suggests that investors in Asia did not really care too much about what Trump said or at least they didn’t let it affect their decisions.

During a speech in Phoenix, Arizona, Trump causally mentioned that he is willing to shut down the US government to get funds for a border wall between the US and Mexico and said that he will “probably” end up terminating the North America Free Trade Agreement.

Any of these comments, had it come from another more serious president, would have led to a catastrophe in markets not just in the US, but across the globe.

Here is what to watch out for: Let’s face it, not many people take Trump’s threats too seriously anymore, but the comments could exacerbate domestic political turmoil even within Trump’s Republican Party. This is important because the US lawmakers and Trump need to agree on a budget before the end of September to keep the US government open and negotiate a deal on raising the debt ceiling to keep the US from default. Watch how lawmakers respond to Trump’s comments.

Main Market Movers – Midday Asian Trading Session

Indexes Value at Midday Daily Change
Japan-Nikkei Stock Average 225 1,9368 -0.35%
China-Shanghai Composite Index 3,282 -0.17%
Australia-ASX 200 5741 0.07%
India-Mumbai Sensex 31,575 0.03%

Cryptocurrencies

Meanwhile, in the world of virtual currencies, trading seemed to be quite stable during the Asian trading session, with Bitcoin and Ethereum both down just slightly.

Bitcoin was down 0.12 percent before midday, trading at around $4100.

Ethereum was trading at around $315, down 0.31 percent.

Currencies

The Japanese yen dropped a slight 0.14 percent against the US dollar at Midday on Wednesday. The JPY/USD rate was at 0.009163.

The Chinese yuan remains unchanged against the dollar.

The Australian dollar is slightly down against the US dollar. AUD/USD was trading at 0.78990, down 0.05%.

Commodities

WTI Oil is unchanged for the day, trading at $48.35 per barrel.

Brent Crude gained 0.10 percent to $52.55 per barrel

Gold was down 0.08 percent to $1,289.38 an ounce

Business News across Asia

In China, top government officials have come out to reaffirm their support for Chinese company’s that invest overseas, after reports of China further cracking down on what officials believe to be “irrational investments.” China’s Ministry of Commerce on Thursday said it supports companies that want to expand overseas and ensure the process will be “stable and long-term.”

Though the government has repeatedly said it supports capable companies to investment in overseas assets, it has kept a tight leash on certain deals, including real estate, entertainment and sports teams in the US.

Take away: Those who worry about China buying up everything in their country can relax a bit, as the Chinese government is now keeping a close eye on this to ensure more capital stays within the country.

In Japan, traders are to a large extent keeping their eyes on the upcoming Fed meeting in Jackson Hole, Wyoming on Friday.

Take Away: In lack of major economic news out of Japan, the Jackson Hole meeting will be the dominant force driving both the JPYUSD rate and Japanese equities.

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Analysis

Technical Analysis: Litecoin and NEO Jump as Bitcoin Trades near $8000

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The cryptocurrency segment continued its bullish run, as the total value of the coins climbed above $230 billion for the first time ever, while Bitcoin also posted marginal new highs. The most valuable currency is still overbought regarding the long-term picture, and we continue to expect a deeper correction in the coming period, despite the recent strong rally. Support levels are still found $7700, $7000, and $6700 while the $8000 level is ahead as a major obstacle.

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BTC/USD, 4-Hour Chart Analysis

Litecoin has been the most active major besides Bitcoin, as it rallied strongly after breaking out above the key $64 resistance and it breached the next target at $75 before heading below $70 again. The coin remains in bullish long- and short-term patterns, and we expect a move above the major resistance zone ahead with the next target found at $82.50.

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Litecoin/USD, 4-Hour Chart Analysis

NEO is showing strength in the second half of the session, while Monero is recovering well from a short-term dip, similarly to IOTA and Ethereum Classic. Ethereum continues to represent stability in the segment, while Ripple failed to build up momentum so far after yesterdays spike higher. With still most of the altcoins being in bullish setups, let’s see the short-term charts.

(more…)

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Analysis

Technical Analysis: Ripple Breaks Out as Bitcoin Tests Highs

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Cryptocurrencies are having another bullish session as the total value of the market surged to a new all-time high near $225 billion, with the help of the rally in BTC and Ripple, and despite the drop in the value of Bitcoin Cash. The most valuable coin its record high yet again after the brief but steep weekend correction, despite the still overbought long-term picture. We still urge traders and investors to wait for a deeper correction before entering new positions here, with support levels found at $7000, $6700, and $6000.

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BTC/USD, 4-Hour Chart Analysis

Ripple has been the other main mover of the day so far, as the coin skyrocketed on huge volume and breached the $0.26 level before turning lower and stabilizing near $0.23. The coin triggered a short-term buy signal by moving above $0.2250 and it remains bullish on both time-frames, despite the pull-back, with another major target level ahead at $0.30.

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Ripple/USD, 4-Hour Chart Analysis

The other majors are little changed expect IOTA, which further added to yesterday’s gains and reached overbought readings, while Ethereum Classic and Dash continue to drift lower in short-term correction patterns. Let’s see the detailed analysis of the short-term charts.

(more…)

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Bitcoin

Wanna Take a Road Trip?

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After many blasts and sounds of gunfighting on the streets of Harare in Zimbabwe, it seems that the army finally has things under control.

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The 93 year old dictator Robert Mugabe is under house arrest for trying to set up his wife, AKA Gucci Grace, as the next leader. The military has seized control over the state media and is preparing for the first regime change in the countries modern history.

With the extremely volatile nature of cryptocurrencies, it’s difficult to view Bitcoin as a safe haven asset. But if you happen to live in a currency-less country in the midst of a coup that has ATM withdrawals capped at $20 a day, the worlds global digital currency seems to provide the only stable alternative.

One bitcoin is now going for about $12,499 in Zimbabwe’s markets. Anybody down for a road trip?

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@MatiGreenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs are valid as of November 16th. All trading carries risk. Only risk capital you’re prepared to lose.

Market Overview

The mild selling attitude that was observed on Wall Street has been completely reversed by Asian investors this morning. The Dow Jones fell 0.65 yesterday, which isn’t much but it is the biggest decline since September. After a big pushback, the China50 and Nikkei 225 are up more than 1.3% today.

This sudden surge in stocks comes as the currencies and commodities markets remain rather docile. There’s plenty of news events on the calendar today that could change that though and of course, all eyes are on Washington DC and the NYSE.

Sneaky Politics

Donald Trump’s Tax bill is expected to pass a vote in the House of Representatives today but it is very likely to fail in the Senate. Republicans took a bold move and tried to squeeze the “repeal of Obamacare” right into the tax cuts plan.

The new clause we will remove the fine for Americans who don’t purchase health insurance, a move that would basically render Obamacare impotent and topple the insurance companies. Sneakily, it would also reduce the effect of the tax bill on the long-term US deficit enough to allow House Republicans to pass the bill without the Democrats’ approval. Though this could be seen as progress, they’ve only brought themselves one step closer to a brick wall when the bill hits the Senate.

The promise of reduced corporate taxes has brought the stocks up quite significantly over the past few months and nobody really knows how well the prospect is currently priced into the markets. With the next Fed meeting a month away and earnings season almost over, this political drama is taking the center stage in American markets.

Crypto BattleGround

Over the past 24 hours, the value of all cryptocurrencies in circulation has risen by an outstanding $5 Billion and the entire market is now worth $220 Billion. Bitcoin itself has added $8.2 Billion to its market cap and now trading at $7,375 on eToro.

After the unification brought on by the cancellation of the Segwit2x hard fork and the quick rejection of the notion to replace BTC with BCH, the first and most popular digital currency is now asserting its dominance over the market.

However, the next $300 could prove very difficult ground to reclaim. There are generally less buyers when the market is near the top and it would require a breakout of the all time highs in order to generate new interest from new buyers.

The sugar rush on the 2x cancelation caused the price to spike as high as $7,872 (orange circle) so everything between the previous high (blue) and the all time high should be considered battleground territory.

Please let me know if you have any questions or comments. A lot of the info that I have comes directly from you, the readers. So please keep tagging me and sending in your thoughts.

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.
The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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