Asia rebounds as PBOC intervenes to ease liquidity concerns

Tuesday, January 21, 2014

Asian shares rebounded after a jittery start to the week with Chinese gains driven by easing liquidity concerns. Both the Shanghai Composite and CSI 300 rallied during overnight trading, adding 0.86% and 0.99% throughout the session respectively with the Shanghai Composite recovering above the 2,000 mark after slipping below this level on Monday. China’s seven day repo rate dropped below 6% after surging to its highest level in four weeks as the PBOC expanded access to lending facilities and added funds in anticipation of increasing demand ahead of the Lunar New Year. The Nikkei was supported 0.99% higher as a weaker yen boosted the prospects of exporters while the TOPIX added modest gains of 0.16% throughout the session.

Platinum prices rose to their highest level in over ten weeks as strikes in South Africa supported the metal towards $1,470 on Monday. The threat of union orchestrated strikes at Anglo American Platinum, Impala Platinum and Lonmin regarding pay has seen platinum prices rally almost 7.5% since the start of the year.

Three month LME copper contracts posted an inside day yesterday in a sign investors were struggling with direction ahead of the release of Chinese manufacturing PMI and US unemployment data due out later this week. Prices have met with tentative resistance around $7,370 with the current area proving difficult to breach on the upside in recent sessions as contracts consolidate sideways. With neither bull nor bear dominating price action since the start of the month, participants will look towards economic data releases which this week are relatively sparse.  

Shanghai Composite rebounds back above 2,000

SHCOMP Index Shanghai Stock Exc 2014 01 21 07 22 52 

China's seven day repo rate eases as PBOC intervenes

RP07 Index CHINA INTERBANK REPO 2014 01 21 07 27 28

A weaker yen supports exporters and the Nikkei higher

JPY Curncy Japanese Yen Spot 2014 01 21 07 24 09

Platinum prices rally on strike action in South Africa

XPT Curncy Platinum Spot Oz 2014 01 21 07 42 00

3-month LME copper prices struggle for direction on sparse economic data

LMCADS03 Comdty LME COPPER 3 2014 01 21 07 33 06


Events for today: Tuesday, 21 January 2014

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More from: Kash Kamal