Asian Pacific markets surge on trade optimism

US stock indices closed sharply higher on Friday. Investors reacted positively to the latest inflation update, the one delayed by the ongoing US government shutdown. The Consumer Price Index (CPI) came in lower than expected, reinforcing the likelihood of a 25-basis point rate cut from the Fed’s FOMC this Wednesday.

US stock index futures then gapped higher when they reopened overnight as investors responded to news of constructive trade talks between the US and China in Malaysia over the weekend.

US Treasury Secretary Scott Bessent reported that the risk of 100% tariffs on Chinese imports was now off the table, as China had agreed in principle to remove restrictions on the export of critical minerals and rare earths, and would resume importing US soyabeans. This sets the scene for Thursday’s meeting between Presidents Trump and Xi Jinping at a side meeting during the APEC summit in South Korea.

Commentators now expect the two leaders to reach a trade agreement, or more likely, a partial deal, while giving themselves plenty of time to thrash out any sticking points.

This morning’s gains took the Dow, S&P 500 and NASDAQ to fresh all-time highs. The Russell 2000 hovered just a point or so below its own record levels.

Source: TN Trader

All this comes ahead of a packed week in terms of economic events. There are rate decisions from the Federal Reserve, Bank of Japan, Bank of Canada and European Central Bank. Investor attention will also turn to a busy corporate earnings calendar. Five of the “Magnificent Seven” tech heavyweights are due to report their results this week. This starts with Alphabet, Microsoft and Meta Platforms on Wednesday, with Apple and Amazon on Thursday.

These corporate giants, along with NVIDIA, which reports later in November, are at the forefront of the push towards artificial general intelligence. At least, these are the biggest public companies, and they may help provide investors with some much-needed clarity over how their multi-billion-dollar investments may pay off. Oil giants Exxon Mobil and Chevron round off the other significant releases on Friday.

Investors in European stock indices took inspiration from moves across Asian Pacific markets and US stock index futures. All the majors were firmer in early trade, hovering at or near all-time highs.

Markets responded positively to Friday’s better-than-expected US inflation data and to news over the weekend that the Trump administration’s threat of 100% tariffs on US imports of Chinese goods was off the table. Optimism was also underpinned by expectations of monetary easing from the Federal Reserve.

Source: TN Trader

Domestically, the German DAX was supported by a better-than-expected German ifo Business Climate survey. This bounced back, having come in below forecasts last month. Yet it continues to hover below 90.00 - a level it last saw around two-and-a-half-years ago.

Commodity currencies, such as the Australian and New Zealand dollar, were in demand overnight as investors responded to an improvement in global risk sentiment following the weekend’s positive news on US–China trade progress.

Otherwise, the US dollar lost some ground across the board, pulling back after last week’s rally. The Dollar Index has repeatedly struggled to break above 99.00, although it continues to trade within sight of this resistance level.

The USD/JPY hit a two-week high overnight and came within a few cents of hitting levels last seen eight months ago. President Trump will meet with Japan’s new Prime Minister, Sanae Takaichi, tomorrow to discuss issues of mutual interest.

Source: TN Trader

The Bank of Japan holds its latest monetary policy meeting this Thursday and is expected to keep interest rates on hold. Analysts had expected another rate hike from the central bank. But they dialled back on this after Ms Takaichi became leader of the governing LDP party earlier this month.

Gold fell again on Monday as traders shifted capital back into equities and other risk assets. This time last week, gold hit an all-time high of $4,381, despite looking very overbought according to its daily MACD. But prices dropped sharply after that, and by Wednesday morning, it was closing in on $4,400 to register an overall high-to-low decline of close to 9%.

It then bounced sharply but ran out of puff as it approached $4,150. It looks as if this has become gold’s first upside resistance target. Prices need to break and hold above here to signal that further gains are possible.

Meanwhile, the daily MACD has pulled back sharply. While it is no longer seriously overbought, it currently indicates that downside momentum has picked up. Gold’s first line of support comes in around $4,000.

Source: TN Trader

Fundamentally, all the positive news around the US-China trade rapprochement has lessened gold’s haven appeal – for now. But that’s not to say that gold won’t find a floor at some stage, and that may persuade traders to come back in on the buy side.

It has been a similar story for silver. Less than a fortnight ago, it hit a fresh all-time high of $54.60. It too was extremely overbought, and the price action since then has seen prices pull back 13% to lows hit overnight. That is the main difference between gold and silver during this sell-off.

While gold rallied off its lows, silver’s bounces have proved short-lived, with this morning’s sell off taking prices down to near-three-week lows. The daily MACD has certainly pulled back from overbought territory. But as things stand, there’s nothing to suggest that silver can’t fall further. In the short-term, it is overdue for a bounce. But as yet, it’s not obvious where support for that bounce may come in.

Source: TN Trader

Oil drifted lower in early trade on Monday, yet prices remained within sight of last week’s highs. These followed a week-long rally, which saw front-month WTI gain close to 12%.

Prices had already started to move higher after front-month WTI broke below $56.00 per barrel to hit its lowest level since May. But they accelerated to the upside on news that the Trump administration was imposing sanctions on Russia’s two biggest oil producers, Rosneft and Lukoil.

Source: TN Trader

It was also trying to persuade India and China to cut back on their purchases of Russian energy. The move took traders off-guard and led to a wave of short covering. Crude had come under intense selling pressure since the summer as it became apparent that supply was plentiful while global demand growth was slowing. That dynamic is still in place.

The International Energy Administration (IEA) calculates that the market could be oversupplied by around 4 million barrels per day next year. If so, the market could comfortably deal with a shortfall in Russian exports.

Cryptocurrencies extended their recent advance, benefiting from the global risk-on mood. Bitcoin extended a rally which began on Thursday. Ether was also strong initially, but subsequently gave back these gains to trade flat.

Other major tokens such as Solana and Neo were also firmer in early trade, mirroring the strength seen across equities and other risk assets. The move higher highlights renewed confidence across markets as investors rotate into growth-oriented assets. With trade optimism improving and the US Federal Reserve poised to ease policy, digital assets have re-entered focus as an alternative play on liquidity and sentiment.

The week ahead may prove to be pivotal, with several significant market-moving events on the near-horizon. Global attention is squarely focused on central bank meetings, particularly those of the Federal Reserve and the Bank of Japan, both of which are expected to clarify their monetary outlook. Corporate earnings remain a major driver, with five of the “Magnificent Seven” set to report.

Beyond policy and earnings, geopolitical headlines should influence sentiment, especially around global trade negotiations. Argentina’s midterm election results, which saw Javier Milei’s party secure victory, add another layer of political interest to the global narrative.