Asia dragged lower on investor caution

Monday, January 27, 2014

Asian equity markets dropped significantly lower as a growing Japanese trade deficit sent local markets plummeting for the third straight session while emerging markets in the region also faced a selloff from jittery investors ahead of the two day FOMC meeting later this week. Japan’s trade balance for December came in at -1302.1bn yen capping a record trade deficit in 2013 as energy costs rose significantly in the aftermath of Fukushima. Imports continued to outstrip exports leading to a rally in the yen which saw it strengthen towards 102.00 against the dollar from the previous week where it looked to target 105.00. The benchmark Nikkei index lost 2.51% throughout the session in a move which extended losses seen towards the end of last week to 5.63% while the TOPIX closed 2.8% lower.

Chinese markets struggled to hold on to Friday’s gains during overnight trading, leading to a reversal in benchmark indices as caution prevailed ahead of both the FOMC meeting and Lunar New Year celebrations later this week. The Shanghai Composite shed 1.03% off its value while the CSI 300 closed 1.33% lower in a move that subsequently saw demand for gold support prices for the yellow metal to a close just above $1,270 on Friday.

European equity markets have had a mixed opening this morning with activity following the Asian session lower as selling pressure saw London’s blue chip index trade 0.8% lower in the first ten minutes of trading while Germany’s DAX trails 0.4% down and France’s CAC struggles to hold on to current levels.

 Japan's trade deficit widens in December

JNTBAL Index Japan Trade Statis 2014 01 27 07 29 16 

Gold prices are supported higher on emerging market concerns

XAU Curncy Gold Spot Oz 2014 01 27 08 01 32



Events for today: Monday, 27 January 2014

0700

UK

Jan

Nationwide house prices

0900

DE

Jan

Ifo Business Climate

1500

US

Dec

New Homes

LT:

Jan Copper, Gold, Silver (COMEX)

Feb Natural Gas (NYMEX)

 View Economic Market Calendar

 

More from: Kash Kamal