(05 NOVEMBER 2018)DAILY MARKET BRIEF 2:Asian shares lower amid multiple risk events

Benefitting from Chinese regulator support via policy measures, Asian shares have been benefitting from a positive trend, stimulated by the bounce in Wall Street. But uncertainties seem to take the ascendant, as trade talks between US and China taking place from 30. November 1. December 2018 is not expected to have the desired effect.

Indeed, uncertainties relating to Fed interest rate hike, Sino-US trade tensions along with US sanctions against Iran oil exports effective since today have favoured a risk-off sentiment among investors. The Hong Kong Hang Seng index was the largest hit, facing a sharp drop of -2.08% followed by Japanese Nikkei 225 (-1.55%), Blue chip Shenzhen CSI 300 (-0.83%) and the Shanghai Composite (-0.41%). Chinese shares remain the largest losers with drops along the -20% year-to-date.

Accordingly, investors’ attention will now be turning to US mid-term elections, where speculations count on the Democratic Party to win control of the House of Representatives. For now, G20 talks between Xi and Trump have a subdued, as analysts bearish outlook continue to weigh on Asian shares.

USD/CNY is expected to bounce back, as fears over trade tensions are taking the upper hand. Currently trading at 6.9284, USD/CNY is heading along 6.94 short-term.

By Vincent Mivelaz