Risk sentiment was mixed in Asian trading on Tuesday, with Asian shares continuing their retreat from highs and the focus on the Georgia election.
Australia’s ASX200 index closed down 0.03% at the close; Japan’s Nikkei 225 index closed 0.41% lower; South Korea’s KOSPI index closed up 1.57%. A shares rose across the board.
There were no major data releases on the market during the day, with the U.S. Senate runoff election in The U.S. state of Georgia in the spotlight to decide who controls the U.S. Senate.
Georgia’s Senate will elect the last two seats in the chamber, and a Republican victory would keep control of the chamber. But a loss would result in a 50-50 split, with vice President Kamala Harris casting the deciding vote, giving the Democrats control of both houses.
According to the latest polls, the Democratic candidate has a slight lead of just two points over the Republican, and the support of both parties continues to tighten.
The Two Democrats now lead the Republicans by 1.7 percent and 2.2 percent, respectively, according to the pollster FiveThirtyEight. The Democrats have widened their lead slightly since the election, but the race is still close.
Both seats are so tightly contested that the results may not be immediately certain, risking a repeat of the chaotic recount that followed last year’s U.S. presidential election, Reuters analysts said.
Both Mr. Biden and Mr. Trump appeared in Georgia on Monday, underscoring the importance of the senate runoff. Three million voters have already cast their ballots.
Georgia Secretary of State Brad Raffensperger said on Monday that it was President Trump, a fellow Republican, who urged him to take an “untimely” call and pressure him to overturn the results of his state’s Presidential election in November.
“2021 has started off with big political and economic news priced in,” James Knightley, chief international economist at ING, said in a research note. No doubt the focus will be on Georgia’s runoff senate seat. If Democrats win both seats, it should lead to the richest fiscal stimulus of 2021. But it could be an excuse for the risk markets to unwind in the short term after the rally.”
In currency markets, the dollar was again on the defensive, falling again before early trading in Europe, and risks remained calm yesterday after a fall in US equities.
The euro/dollar held above its 100-hour moving average of 1.2266 as bulls tried to maintain short-term control. The Australian dollar also returned to above 0.77 on the day. The pound was a bit better today after a bit of a struggle yesterday.
In commodities, gold and silver outshone the dollar’s slight retreat yesterday, with gold remaining near $1,940 and silver continuing to trade above $27, its highest level since September.
Matt Maley, strategist at Miller Tabak in New York, said gold and silver are likely to hit new highs in the New Year, despite some resistance in the afternoon. “Gold tests the $1,900 / oz level above the channel, and after that, it becomes bullish.” It would take a break above $1,950 an ounce to confirm a return to an upward trend.
In addition to U.S. political events, some of the market’s attention remains focused on the U.S. and China situation. The New York Stock Exchange said it will cancel the delisting of three Chinese telecom giants, Bloomberg reported today. In a brief statement late Monday, the New York Stock Exchange said it had decided, after further consultations with regulators, that it no longer planned to delist three Chinese telecom operators.
The move comes just four days after the New York Stock Exchange announced it was starting delisting proceedings against three telecom operators, China Mobile, China Telecom and China Unicom. But in a statement late Monday, the NYSE said it had withdrawn the action.
China unicom announced on January 5, said: “the company noted that the New York stock exchange has updated its previous decision, according to the New York stock exchange and relevant regulators for further consultation, the New York stock exchange regulators are no longer going to push for three issuers of securities (including the company’s American depositary securities) action under the city, and now the company will continue to be traded on the New York stock exchange. The Company will continue to closely monitor the progress of the relevant matters and will make further announcements in due course in accordance with the stock Exchange of Hong Kong Limited’s securities listing rules and applicable laws.”
China Telecom said in its latest announcement on Jan. 5 that it will continue to trade on the New York Stock Exchange for the time being. The NYSE regulatory Authority will continue to evaluate the applicability of the Executive Order (as defined in the Company’s announcements dated November 13, 2020 and January 4, 2021) to the Company and its continued listing status.
Trend analysis of major currencies:
Euro: The euro/DOLLAR has been trading around 1.2265 after retreating from its previous session high and trying to rebound further during the day. From a technical point of view, the 4-hour chart shows that the MACD green momentum column holds slightly stable, the RSI indicator holds steady around the 50 level, and the KDJ indicator hovered around the 50 level, indicating short-term or volatile prices. Short-term initial support at 1.2220, initial resistance can be seen at 1.2300.
Sterling: Sterling fell more than 100 points against the dollar yesterday, trying to rebound back above 1.36 on the day. From a technical point of view, the 4-hour chart shows a slight weakening of the MACD green momentum column, the RSI indicator approaching the 50 level, and the KDJ indicator hovering above the oversold level, indicating short term or consolidation in prices. Short-term initial support at 1.3540, initial resistance at 1.3650.
Yen: The dollar/yen in yesterday’s rebound after the day fell to defend 103 level. From a technical point of view, the 4-hour chart shows that the MACD green momentum column weakened slightly and nearly disappeared. The RSI index fell further below the 50 level, while the KDJ index traded at the 50 level. It is expected that the price will move down in the short term or continue to shock. Short-term initial support at 102.70 and initial resistance at 103.35.