12-NOV-2018, MONDAY

1) Asian Stocks Inch Higher From Early Falls
2) Gold Prices May Fall Further as US Dollar Recovery Continues
3) Crude Oil Prices Bounce as OPEC+Officials Hint at New Output Cuts in 2019

1) Asian Stocks Inch Higher From Early Falls

Most Asian stocks clawed back into the green on Monday after a tepid start characterized by the global growth worries which had weighed last week. Oil prices were also in focus following comments from OPEC at the weekend suggesting that rising production and a tepid outlook for major economies will leave the market oversupplied into 2019. Saudi Arabia announced a production cut for December in an effort to halt a supply glut which has seen prices lose 20% since the start of October.

Still, investors clearly decided that equity had suffered enough for now part-way through the Asian morning. The Nikkei 225 was up by 0.2% as its close loomed, with the ASX 200 in the green by 0.2%. Similarly modest gains were evident in China, with Shanghai up 0.6% and Hong Kong higher by 0.1%. Only Seoul’s Kospi bucked the general trend, as it often seems to do these days, falling 0.4%.

The Nikkei 225 is flirting with the uptrend line which had previously held the market since October 29.
This is interesting because it looks as though the still-nascent recent uptrend is fading out before it has reclaimed the precious significant peak – the 22,943 hit in late October. Conclusive failure to hold above the current uptrend, defines as a daily or weekly close below it, would put the 21000 region back in bearish focus.

2) Gold Prices May Fall Further as US Dollar Recovery Continues

Gold prices fell even as bond yields tracked stocks lower and the priced-in rate hike path implied in Fed Funds futures flattened Friday. The US Dollar found renewed haven appeal against the risk-off backdrop, and its rise undermined the appeal of anti-fiat alternatives epitomized by the yellow metal.

Looking ahead, gold may continue to suffer as risk appetite recovers. S&P 500 futures are pointing convincingly higher ahead of the opening bell on Wall Street, hinting that a recovery in yields is poised to pressure non-interest-bearing alternatives. For its part, the Greenback seems to have become adept at pivoting from haven- to policy-based arguments for gains. Indeed, it is marching higher alongside US stock futures and Treasury yields in late Asia Pacific trade. More of the same is a toxic mix for gold.

Gold prices pushed through range support in the 1211.05-14.30 area, exposing a rising trend line at 1198.51. A further push below that targets the 1180.86-87.83 zone. Alternatively, a move back above 1214.30 exposes the 1260.80-66.44 region next.

3) Crude Oil Prices Bounce as OPEC+Officials Hint at New Output Cuts in 2019

Crude oil prices also tracked lower, succumbing to de-facto selling pressure because they are denominated in USD terms on global markets. A spirited recovery has been triggered over the weekend however – producing an upward gap at Monday’s trading open – after OPEC+ officials worried aloud about oversupply in 2019. Markets seemed to read that as signaling that the cartel and like-minded producers – notably, Russia – may cut output quotas once again having raised earlier this year. That was meant to cushion the blow from the sidelining of shipments from Iran after the re-imposition of US sanctions.

Meanwhile, Crude Oil might find support from chatter emerging out of the Abu Dhabi International Petroleum Exhibition and Conference (Adipec). A slew of OPEC+ bigwigs are in attendance. They will probably continue to jawbone prices upward with allusions to cutting production levels anew. A stronger US Dollar and hefty incoming event risk might temper upside follow-through however. Upcoming data flow seems ominous for anti-USD assets while EIA drilling productivity statistics and an annual IEA energy outlook report may highlight headwinds from swelling US output.

Crude oil prices are probing back above the $60/bbl figure. A daily close back above this barrier paves the way to retest support-turned resistance marked by the April 6 lowat 61.84, followed by a falling trend line at 63.20. Alternatively, a reversal back below the 60.00 aims for the February 9 low at 58.11. The longer-term chart setup hints a major top has been established.