APAC Morning Update - 11 Dec 2020

What goes up must… keep going up? It’s a funny old day, with Brexit news colliding with IPO euphoria.

The Pound is off almost 2% with UK PM Johnson coming out saying to prepare for no EU Trade deal after Brexit, and that the deal on the table is not right for the UK. (Could have maybe had a glance at it a bit sooner Boris?). This is not the absolute final nail in the coffin, and the cynical among us could argue he is just saying that so when they push a diet-deal it looks a touch more polished. However, it is the most definite thing said on Brexit for a while, and the Pound is responding by breaking down across the board. The EUR is also off, though not quite so much.

Iron ore remains on the charge, back to 6 year highs or up almost 300% off its 2016 lows. This has really helped support the AUD, and maybe support is not quite the right word. The AUD is breaking higher across its competitors, and is even above the big 0.7500 level as we speak. There are a lot of issues around the world, and a lot of places where you wouldn’t want to be, let alone invest in. Against that backdrop, both New Zealand and Australia are looking pretty good.

Back to IPOs, AirBnb had their IPO overnight, listing at an IPO price of $68, but opened at $146. Not a bad mornings profit. It’s a interesting response to an interesting problem. If everything is overvalued, what do you overweight your portfolio in? Turns out the answer is everything, or maybe to be more precise, anything…

Global equity are mixed: Dow -0.4%, S&P 500 -0.3%, FTSE +0.5%, DAX -0.3%, CAC +0.1%, Nikkei -0.2%, Shanghai +0.0%.

Gold prices are up 0.3%, currently trading at $1,835 an ounce. WTI Crude Oil prices are up 3.2% trading at $47.06 a barrel.