Jubilant investors return the Hong Kong markets en masse HongKong OOTT Ringgit Gold tinfoilhat

Hang Seng

The Hang Seng bounced convincingly higher at the open as jubilant investors returned to the market en masse. And with a cavernous gap to retrace, this morning's moves could easily extend and fill that void while supported by the likely easing of financial conditions as the threat of capital outflows retreat.

Indeed, Hong Kong highly leveraged property owners are breathing a collective sigh of relief, and the Hang Sang is in a celebratory mood as well!

 

Oil

Markets are wedged between duelling narratives today as the threat of supply shock on escalating Middle East tension is offset by global recessionary fears as escalating trade concerns continue looming ominously over oil markets.

 

Gold

Gold is trading very natural today but with a bearish bias as some of the more overzealous US rate cut prognostications pull back as the robust USD retail sales print has added to the US dollars appeal and put an effective cap on oil prices so far.

 

The Malaysian Ringgit

The USD dollar remains supported after Friday's robust US retail sales print has caused some overzealous rate cut positions to pare.

I think this is negative for the Ringgit on two fronts. First, it lessens the Ringgit yield appeal, but a less dovish Fed would also be harmful to Asia risk sentiment and supports our view that the Ringgit will continue to trade with a negative bias compounded by escalating US-China trade war risk. Continue favour buying dips within our 4.1650 4.1950 weekly range outlook.

Unless the Fed leans uber-dovish, I don't think this changes the USD dollar appeal as traders continue focusing on  slowing growth outside of the US markets

 

Views from the tin foil hat chair

Of course, trade wars are looming ominously, but I've got an out of the box view when it comes to Trump

 While the FOMC and Trade concerns continue vying for headline space, the launch of the presidential election campaigns this week will also compete for a headline . But it's oo early in the campaign process to detract from the markets task at hand which is navigation the FOMC and correctly positioning for G-20.

But if there were ever a time for a political win, a trade deal, even a watered down one would be great for Trump to kick start his 2020 election run.