Market Brief: Mixed Response From Trade 'Developments'

City Index | Aug 30, 2019 02:40AM ET

The U.S. and China are to resume in person trade talks in September, after President Donald Trump said discussion were already on the way later today. On Sunday, the U.S. is set to collect a further 15% on Chinese imports worth over $125 billion.
Whilst this provided a slight tailwind for equities, currency markets were less convinced. AUD and NZD trading firmly lower and are today’s weakest majors (JPY and UD are the strongest). Still, NZD is still reeling form yesterday’s dire business confidence reads, and AUD is under the added pressure of weaker building approvals and housing credit. And looking tariffs which kick on Sunday, along with lower iron ore prices for AUD are also piling on the pressure.
Mixed data from Japan saw industrial production rebound and retail sales slump. Production rose 1.3% in July (although is -1% % YoY) with expectations for the next 1-2 months at 2.7% and 0.6% respectively, despite concerns over the trade war. Whilst this is good for the business sector, retail sales slumped by 2.5% (fastest contraction since November 2015) to take the YoY rate to -2%. Unemployment fell to 2.2%, its lowest rate since August 1992.

Asian stock indices have continued to recoup last week’s losses on the theme of “U.S/China trade deal optimism’” where China’s commerce ministry commented yesterday that a Sep meeting was being discussed but added it was important for Washington to cancel a tariff increase. A new round of U.S. tariffs, 15% on US$550 billion worth of Chinese goods is scheduled to take effect on this Sun.
The best performers are KOSPI 200, S&P/ASX 200 and Nikkei 225 which have gained by more than 1.00% as at today’s Asian mid-session.
Interestingly, China A50 has underperformed against the rest where it has inched up only by 0.30%. A firm USD/CNH could be the reason that prevent traders from taking aggressive long positions. The USD/CNH (offshore yuan) has started to recoup yesterday’s losses where it rebounded by 196 pips at the 7.1400/1300 key short-term support to print a current intraday high of 7.1602 in today’s Asia session.

Get The News You Want

Read market moving news with a personalized feed of stocks you care about.

Get The App

Hong Kong’s Hang Seng Index’s gains have been lacklustre due to on-going localised social unrest. It has been reported that local police have arrested three prominent protest leaders ahead of planned mass demonstrations this weekend. Key property developer stocks underperformed where Sun Hung Kai Properties, Swire Pacific and CK Assets have traded down by -2.65%, -1.22% and -1.28% respectively.
Up Next

Hong Kong Retail Sales for Jul out later today at 0830 GMT. Data for Jun came in at -7.6% y/y/ where another round of weak data for Jul is likely to reinforce a technical recession in Q3 for Hong Kong. Q2 GDP came in at -0.4% q/q.
Canadian GDP is expected to rebound from 0.4% YoY to 3%. Whilst data overall continues to favour BoC not easing, a miss for GDP later today could rattle CAD crosses. However, hitting or exceeding expectations could provide a tailwind for their stock index (TSX 60) which appears to the first of the major indices to break higher form its range.

Original Post

Written By: City Index

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
Show moreShow Less

Send Feedback

Privacy & Disclaimer

Follow us

© 2007-2024 Fusion Media Limited.
All Rights Reserved