Asian markets are looking to recover as the US dollar cools down for the second day in a row. This, along with some resistance in Treasury yields, is creating a favorable environment for regional indices.
The Nikkei 225 has risen by 0.30%, the ASX 200 has gained 0.70%, and the KOSPI is up 0.32%. Investors are cautiously optimistic and taking advantage of the dollar"s retreat.
The decline in the US dollar is likely due to profit-taking, as the market has already factored in much of the less-dovish outlook from the Fed during the Trump administration. This sets the stage for potential gains in Asian markets in the coming days.
Nvidia"s upcoming earnings report is expected to have a significant impact on the S&P 500 and Nasdaq 100 indices. Investors are approaching this event with caution, considering Nvidia"s strong track record. The lead-up to the earnings report may temper aggressive risk-taking.
The Reserve Bank of Australia"s (RBA) meeting minutes are expected to provide insights into the central bank"s monetary policy stance. The RBA is unlikely to cut rates before May of next year, citing above-target inflation as a reason for caution. The RBA"s communication will be closely monitored by market participants.
The Nikkei 225 index is currently testing a lower wedge trendline support, indicating choppy trading in recent weeks. Despite struggles to achieve higher highs in November, the lower wedge trendline support may present an opportunity for long positions. However, caution is warranted as a breakdown below last week"s low could signal potential risks for investors.