Markets Live, Friday 22 November


Market sentiment is swinging from trade-war headline to trade-war headline. It’s catalysed increased volatility in financial markets, as some doubt grows about the prospect of a phase one trade deal. The trade-related news released overnight was, notionally, of the positive variety. That’s seen the sell-off in equities ease, setting up the ASX200 for something of a recovery today, after two days of heavy falls.

Focus will largely remain on trade-war updates as they flow through the wires to end the week. However, Europe’s economy will be under the spotlight, with a speech from ECB President Christine Lagarde, along with European PMI data, to be closely watched.

US Congress passed the Hong Kong Human Rights And Democracy Act, prompting China to pledge “retaliation” to the decision. The animus provided the material for a sequence of trade-war related headlines yesterday, most of which that pointed major conflict in US and China trade-talks. Though the volatility index (VIX) remains relatively elevated, the exchange of niceties between the US and China has extinguished some of the bearishness that crept into markets. US stocks are only a smidgen lower, with the S&P500 dropping only 0.1 per cent last night. 

What looks like a solid pop higher for the ASX today comes off the back a couple of day’s of heavy losses across the market. Australian equities have had to battle the combination of both negative macro and micro news.

Just yesterday, that lead the ASX200 0.74 per cent lower, in what was a day of very high activity, and poor market breadth. From a price perspective, too, the ASX200 broke with an uptrend it had been building upon since the beginning of October. Although the trend remains firmly pointed to the upside, it appears the ASX200 faces a slightly greater battle in reclaiming its record highs.


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