Asian Equities Slide on Apple’s Warnings, AUD Feels the Heat of RBA Minutes

Apple Warnings Turn Market Sentiment Upside Down

The dollar traded higher against most of the other G10 currencies on Monday and during the Asian morning Tuesday. It gained against NOK, AUD, GBP, NZD, CAD and EUR in that order, while it underperformed only against CHF and JPY. The greenback was found virtually unchanged versus SEK.

Nikkei 225 — Technical Outlook

From around the end of October 2019, the Nikkei 225 index continues to trade within a wide range, roughly between the 22632 and 24162 levels. After failing to test the upper bound of that range in the beginning of February, the index fell under some selling pressure and is now drifting lower. Judging by the recent price action and our oscillators, we may see a bit more downside in the near term, hence why we will take a somewhat bearish approach for now.

RBA Discussed Cutting Rates Last Time it Met

Back to the currencies, the Aussie was among the main losers. Apart from the switch to risk-off, the Australian currency may have also felt the heat of the minutes from the latest RBA monetary policy gathering. At that meeting, the Bank decided to keep interest rates unchanged at 0.75%, while the statement accompanying the decision was less dovish than anticipated, with officials repeating that the long and variable lags in the transmission of monetary policy allowed them to keep rates steady, although they remained prepared to ease further if needed.

AUD/JPY — Technical Outlook

Yesterday, AUD/JPY broke below the lower side of the ascending triangle, which it started forming from the beginning of February. This move indicated that there might be a bit more downside to come. The pair also fell below its key support zone between the 73.60 and 73.55 levels, which adds a bit more bearishness to the whole near-term outlook. For now, we will remain somewhat bearish and target slightly lower areas.

As for Today’s Events

During the European morning, the UK employment report for December is due to be released. The unemployment rate is forecast to have held steady at its 45-year low of 3.8%, while average weekly earnings including bonuses are expected to have slowed to +3.0% yoy from +3.2%. The excluding bonuses rate is anticipated to have ticked down to +3.3% yoy from 3.4%. According to the IHS Markit/KPMG & REC Report on Jobs for the month, starting salaries for both permanent and temporary staff accelerated somewhat from November’s lows, which suggests that the risks surrounding earnings may be tilted somewhat to the upside.

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