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Asian Sentiment Firms as Global Tension Ease

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Asian and Pacific Rim markets were broadly higher on Friday as regional sentiment improved. The prospect of an all-out war in the Middle East between Iran and the United States has eased.

This has bolstered global sentiment and sent world-wide equity indices higher. Safe haven asset classes like gold, the Japanese yen and Swiss franc have fallen lower. The price of crude oil has also pared back some recent gains during the Asian trade session on Friday.

In Japan, the benchmark Nikkei 225 was down 0.26 percent by the afternoon. The broader Topix index was trading higher by a quarter of a percent.

In South Korea, the Kospi composite index was trading up over half a percent.

On the mainland, in China, the Shanghai composite was trading down 0.26 percent and shares on the smaller Shenzhen composite lost 0.22 percent.

In Hong Kong, the Hang Seng index was trading around the flat line.

Elsewhere in the Asian and Pacific Rim, the Taiex, in Taiwan, was up 0.23 percent by the afternoon. On Saturday, Taiwan heads to the polls for presidential and legislative elections.

Asian Sentiment Calms Down as Tensions between Iran and the United States Ease

The prospect of a full scale military conflict between Iran and the United States has waned since Wednesday.

Both countries are pulling back from further military conflict after a U.S. drone strike killed a top Iranian general. Iran, yesterday, launched a number of missiles at U.S. bases in Iraq. No casualties were reported.

Yesterday, lawmakers voted to limit what military actions President Donald Trump could take with Iran. The vote was among party lines and highlighted the deep political divide.

Tehran has now said that they will cooperate with the shooting down of the Ukrainian airliner that killed 175 passengers and crew.

On the economic calendar for Friday at 8:15 am EST, the United States will release their NFP labor report. Canada also has key labor data on the calendar.

The U.S. non-farm payroll report (NFP), however, will headline the calendar. The U.S. will also publish their unemployment rate, labor participation rate and hourly wages.

Analysts are expecting the U.S. economy to add 150K new jobs in December. The unemployment rate to remain steady at 3.5 percent. Finally, hourly wages are expected to tick higher for December.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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