· South African Rand Optimistic SACOB Survey Boosts <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Rand<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
· Mexican Peso Peso Remains Narrowly Rangebound
· Nordics Nordics Pull Ahead On Full Schedule
· Hong Kong Dollar USDHKD Moves Contrary To News
· Singapore Dollar Straits Hits Another Record
South African <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Rand<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Rising to a two month high, the South African rand was boosted by lots of positive news on the session. The SACOB business confidence report, which overshadowed both net and gross reserves surveys, jumped higher and reversed the declining trend that was taking place between the months of May and September. Increasing to a 99.5 reading, the report was boosted as a narrowed trade deficit, heightened consumer spending and lower consumer inflation figures comparative to broader expectations boosted provider sentiment. The report additionally reflects resiliency in the face of rising interest rates. Simply, rate hikes up to this point are somewhat negligible as manufacturers still remain openly positive to broader market gains, allowing further rate hike speculation to arrive at the forefront. The notion additionally boosted foreign speculation as traders continue to see nothing but expansion in regional based assets, with many turning to the benchmark stock market. In afternoon trading, South Africas main equity index jumped to surpass the 24,000 level for the first time on record. Rising 71.62 points to 24,022.61 at the close in Johannesburg, the FTSE/JSE Africa All Share index was buoyed once again by higher precious metal contracts. Although paring back slightly in the overnight and New York, commodity futures still remain supported with platinum contracts hovering just below $1,200 an ounce and gold contracts slightly below the $628 a troy ounce level. Both metals have been bid higher throughout the year, and this should translate into higher profit earnings for the countrys main exporter/producers. As a result, Anglo American, the worlds second biggest mining company, led stocks higher, reaching a record close at 348.41 rand, gaining 2.41 rand. Unfortunately, positive bidding may be absent heading into the overnight with no economic data to spark things off. The next release, expected by the market, will be manufacturing production in two days time.
Mexican Peso
A day after three explosions rocked Mexico City, there was little reason to buy the Mexican peso. As a result, the days range remained similar to the previous session, rising slightly above the 10.80 figure. The days move was in line with the intermediate rangebound condition that is being purported as the currency pair is finding considerable upside and downside barriers between 10.85 and 10.80 respectively. A technical suggestion of indecision, the recent price action may be telling of the markets concern over the longer term prospects of the Mexican economy. In a word, trade relations. As prospects for growth in the worlds largest economy, the US, grow dimmer, fear is rising that the bad vibes may translate into declining times for the Mexican economy. According to recent data, the US is expanding at the slowest pace since 2003. This is likely to weigh on the economy and its trade partners especially Mexico as the US purchases close to 85 percent of the countrys exports. The concerned selling pressure is likely to be exacerbated when combined with the recent turmoil that has beset Mexico City and the city state of Oaxaca. As a result, intense focus is likely to be placed on the President-elect when he takes office in three weeks, helping to establish the longer term directional bias. Separately, profit taking took the Bolsa index slightly lower on the session. The benchmark equity index dropped 118 points to 23,615.14, however remained higher on the year by 30 percent. Economic data was relatively negligent as the market shrugged off a lower than expected 8.3 percent gross fixed investment figure.
Nordics Swedish, Norway and Denmark
Back to the old ranges, all three Nordic currencies strengthened against the US dollar, even on mixed data. In the economy of Norway, industrial production figures took center stage as overall productivity fell compared to previous months figures. For the month of September, the seasonally adjusted figured dipped by 1.1 percent. Subsequently, the non-seasonally adjusted annualized figure declined further, taking the previous 2.7 percent lower to a 4.7 percent drop on the year. The results arent that much of a surprise compared to yesterdays purchasing managers index which printed a lower 61.8 for the month of October. Although lower on both measures, the pullback can be somewhat expected as the economy overall has done a positive job for the year. The negative results are additionally not likely to purport a stall in already expected tightening by the Norges Bank, supporting the Krone in the Asian session. Separately, the Swedish balance budget report showed a wider deficit as Denmark industrial production and orders were mixed on the month. For September, reports improved by 0.7 percent in production compared to a decline of 2.4 percent in August. Subsequently, however, orders dropped by 1 percent.
Hong Kong Dollar
Fundamentals ran contrary on the day against the Hong Kong dollar as the days take was widely positive for the underlying Asian currency. Boosting the currency in the overnight was news that the benchmark stock index closed higher for a fifth record close. Once again supported by speculation in developer companies and sentiment of higher property values, Hong Kongs Hang Seng index closed at 18,939.31 at the close. The highest on record, the benchmark index has been bolstered by rising demand for Asian based assets connected with China and a slower growing global market. The benchmark index is now higher by 20 percent on the year. Subsequently, once again, Hong Kongs top ranked property developer, Sun Hung Kai, led shares by climbing HK$2.95 to HK$91.30. Separately, and taking top billing for the day, was the economys report on foreign currency reserves. Rising above the previous report of $130.3 billion, the $131.2 billion figure for the month of October coincides with increasing attention on the $1 trillion mark reached by mainland China. Still ranked as seventh largest holder of foreign reserves overall behind the mainland power, Hong Kong may be setting itself up for competition, even though most, if not all of the funds, are used to maintain the two-way pegged system.
Singapore Dollar
Singapore markets were in line with Hong Kong on session. The Straits Index, much like the Hang Seng, hit another record high as real estate companies in the region boosted the markets benchmark index. Leading shares higher, United Overseas Bank Ltd. stock supported overall interest in lenders as expectations continue to rise on an increase in property sales boosting mortgage lending activity. Shares of Singapores second largest lender added 10 cents to S$18.10. As a result, the Straits index advanced another 20.09 to close at 2,749.22 after setting an intraday high of 2,764.91 and lent some intraday strength to the Asian tiger currency. In addition, foreign currency reserves were built higher over the course of the month, rising to $131.91 billion compared to last months $129.42 billion. Positive for the health of the economy, the report lent to further overall bullishness witnessed over the past month.
