Read full technical analysis report here
- Asian shares took their cue from Wall Street and slipped on Friday, but were still on track for gains in a week marked by a depreciating yuan in China and the first U.S. interest rate hike in nearly a decade. By contrast, Taiwan’s central bank cut interest rates for the second time this year and said it would keep monetary policy loose to shore up growth in the island’s trade-dependent economy as the global demand outlook worsened. China’s yuan has weakened against the dollar for 10 straight sessions through Thursday, the longest weakening streak on record, after the central bank guided the Chinese currency lower. Wall Street drooped on Thursday as crude oil futures continued to wallow at multi-year lows against a backdrop of oversupply as well as a stronger dollar following the U.S. Federal Reserve’s widely anticipated tightening on Wednesday.
- The Bank of Japan maintained its base money target under its massive stimulus program on Friday but decided to expand the range of assets it purchases, a move aimed at encouraging firms to spend more on wages and investment. The central bank kept intact its policy target of increasing base money – or cash and deposits in circulation – at an annual pace of 80 trillion yen ($655 billion) via aggressive buying of government bonds, exchange-traded funds (ETFs) and trust funds investing in property. In addition to such purchases, the BOJ decided to set aside 300 billion yen to buy ETFs that specifically target shares of companies actively pursuing capital expenditure. With its massive purchases already drying up liquidity in the Japanese government bond (JGB) market, the central bank will also extend the maturity of JGBs it buys to 12 years from next year so it can continue buying up bonds.
- Crude futures were mixed in Asian trading on Friday as fresh signs of inventory building and the Federal Reserves rate hike this week kept prices under pressure amid a global glut of oil that shows no sign of abating. Market intelligence company Genscape reported an inventory increase of 1.4 million barrels at the Cushing, Oklahoma delivery hub for WTI futures, traders who saw the data said on Thursday. That came a day after the U.S. Energy Information Administration (EIA) said crude stockpiles across the United States rose by 4.8 million barrels last week, compared with analysts expectations for a draw. mostly priced in a rate hike this week, with the main question now hinging on how many increases will follow next year. The World Bank said on Thursday it would lend Iraq $1.2 billion in emergency support to help it deal with the economic effects of its fight against Islamic State militants and low oil prices. The budget support loan will be disbursed in a single tranche and should be available to Iraq before the end of the year, said Ferid Belhaj, a senior World Bank regional official who oversees Iraq. Iraq’s state finances are heavily dependent on oil revenues, which have sunk as oil prices have plunged. At the same time, Baghdad has ramped up military spending in its battle against the hardline Islamic State group, which has killed and displaced thousands, and destroyed services and infrastructure. Iraq has been fighting back after Islamic State overran a third of the country in 2014. The jihadists still hold territory in Iraq, including the second city Mosul, and swathes of neighboring Syria. Belhaj said Iraq had committed to undertake economic reforms to fix structural distortions that had dragged on its economy even before the current crisis.