• Good moods dominate in Asia, Korean index surges to all time highs
  • AUD gains as we see profit taking from the latest US dollar rally
  • NOK struggles after disappointing inflation print

South Korean equity market was down for more than a week and a session on Tuesday was the first one when it traded in October.  It started in style surging by more than 2% in a catch up to other major markets that wasted no time rallying while Korea was on holiday. Skeptics used to suggest that tension on the Korean peninsula could lead to a global correction but what we can see is that it’s not even enough to trigger a pullback on the Korean domestic markets. Stocks are surging there ahead of the earnings season as the Kospi200 (KOSP200 on xStation platform) is testing all time highs. 

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The Korean market opened for the first time in October and the KOSP200 surged to all time highs. Source: xStation5 

We can see on the chart that the 150-day moving average acted as a support here, just above the 300-points mark and a double bottom formation was created. Clearly this market remains in an upward trend and traders could look for this 150-day average as a support going forward. 

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While the KOSP200 has been a clear top mover so far today we can also see AUD gains and some profit taking on the US dollar. Source: xStation5 

As optimism dominated in Asia the Australian dollar was able to recover recent losses and is the strongest G10 currency gaining 0.4% on the greenback at the European opening. In fact the US dollar is the weakest currency as the EURUSD climbs to 1.1770 despite a solid (especially in terms of wages) NFP report last week. It looks like traders could be taking profits from the USD surge in September and early October. The euro is being buoyed by solid trade data from Germany which saw trade balance increasing to 20 billion euro in August on higher than expected trade volumes. On the other hand the NOK is struggling as inflation increased far less than expected in September (core inflation was at 1%, up from 0.9% in August but far below the consensus at 1.2%). 

The Turkish lira is currently the strongest currency, gaining some 0.5% against the US dollar but it’s only a partial recovery from yesterday’s losses when it was hit by a visa spat between Turkey and the US.