Asian equities took clues from strong US session on Friday and opened broadly higher.

Dollar index rallied on improving risk sentiment, despite a string of missing US data that came in on Friday. US consumer sentiment, personal consumption (MoM) and ISM Manufacturing PMI fell below consensus forecast, suggesting fundamental factors surrounding consumer spending are still tepid.

Latest news that US and Chinaare moving closer tostrike a deal to tackle the trade tariffs boosted risk appetite across Asia. Key issues surrounding intellectual property protection, technology and structural reforms are on top of the agenda, and US trade representatives need Beijing’s full compliance and enforcement of the agreement. Nonetheless, hope for removing trade tariffs on US$200bn Chinese goods is viewed as a confidence booster for investors around the globe.

S&P 500 Index rallied 0.69%, piercing through a key resistance level of 2,800 points. Energy (+1.81%), healthcare (+1.41%) and consumer discretionary (+0.92%) were leading the gain whereas consumer staples (-0.17%) and Real Estate (-0.12%) were among the worst performers. s

The US dollar index erased gain on Monday morning following President Trump’s warning against strong dollar on Saturday. Dollar Index moderated to 96.3 area, halting a three-day gain.  Against this backdrop, gold, oil and commodity currencies – AUD, CAD – rebounded this morning. Gold price came back to US$1,295 area from US$1,290 seen at Friday’s closing, with immediate resistance level at US$1,300 area. Its trend has turned bearish as both 10 Day SMA and SuperTrend (10,2) flipped downwards – a typical bearish setup.

Brent Crudeoil prices rebounded mildly this morning to $65.2, boosted by weaker US dollar. Technically, it is likely to consolidate within a technical range between US$64.0- 68.0 (50% Retracement) area. Its uptrend remains intact for now but once an upward SuperTrend (10,2) is broken at US$64.0 an opposite trend is likely to happen. President Trump’s tweet against high oil prices has led to a technical correction in energy prices.

This week’s calendar is packed by China’s annual political consultative conference held in Beijing, alongside with interest rate decisions from Reserve Bank of Australia (Tue), Bank of Canada (Wed), and ECB (Thur). US non-farm payroll on this Friday will sharpen markets’ expectation for Fed’s monetary policy and give clues of the health of US jobs market.

US Personal Consumption (MoM)

 

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