President Trump Fires Another Shot at China, Says to Increase Tariffs While Asian Markets Take a Plunge

The trade war between two macro economies, U.S and China which had lasted for 16 months in which both countries slapped tariffs on their respective goods seemed to make a headway last few weeks when reports came through that the two countries were nearing a preliminary phase of the trade deal and the tariffs on the goods will be reversed.

However, in a twist, an air of uncertainty hovered above the deal as many speculated that the U.S unwillingness to remove some certain tariffs which many seemed to draw that premise from U.S. white house spoke woman’s interview with a major news channel, which was later corroborated by President Trump himself.

Investors were taken aback as uncertainty rose as to when the preliminary deal will be signed. In recent news, U.S. President as quoted declared that the preliminary deal will happen soon while revealing that he may slap more tariffs on Chinese goods if the deal doesn’t pull through.

Asian Market Takes a Plunge
In the wake of this news, the Asian market took a plunge. The Shanghai Composite Index SHCOMP now stands at 0.31% to 2,908.63, Nikkei 225 NIK, standing now at -1.75% to 23,303.13 while Hang Seng HSI, previously -1.82% slipped by 1.9% to 26,549.
Kospi 180721,standing previously at -0.86% fell by 0.8% to 2,124.68 and Sydney’s S&P-ASX 200 XJO, standing previously at 0.81% took a retreat by 0.6% to 6,715.70. Taiwan Y9999 now stands at -0.46%, Singapore STI before -0.83% took a plunge.

Nissan 7201, standing previously at -0.50% retreated while yet to recover from last year 70% incomes and revenue drop. Fast Retailing 9983 and Inpex 1605, standing in negatives previously also fell. As well as LG Electronics and Foxconn.

Hong Kong’s real estate stocks like New World Development 17, Wharf Real Estate 199 and Sino Land Co. 83, were dealt a blow given the increased unrest in Hongkong.

On the other end, the news had a little impact on the U.S. markets as the USD paired with the Japanese yen which previously had a market gain of 0.09% held steady at 109.06 yen, a slight increase from Tuesday’s 109.01 yen.

In the last five weeks, the bulls tested the U.S. markets as the benchmark S&P 500 index of the Wall street SPX having a previous gain 0.16% topped a 3,100 level high but had a slight drop to end at 3,091.84.DJIA held steady at 27,691.49 while The Nasdaq COMP recorded a gain of 0.3% to stand at 8,486.09. The stocks took a bullish trend likewise. However Benchmark US Crude took a bearish turn likewise NewZealand NZ50GR.

Later this week, the U.S. will release October inflation figures while analysts predict a rise in retail sales for October. In view also is Powell’s testimony to U.S. Congress on Wednesday while hopes are held that Federal reserve will hold steady on its interest rates reduction.

An Inside Look on Market Expectations for the Upcoming Week

The week will undoubtedly be memorable for all trades. Let’s take a quick look at the expectations for the week.

Politics and Others
Making news will be the ongoing accusation saga in the White House that will be made public. Its impact has not yet been felt in the market, but it can be felt in the coming weeks.

On Friday, the U.S. announced its unwillingness to eliminate certain tariffs. With the uncertainty of a tariff reversal before the preliminary agreement, it seems that China is still unsure and, therefore, needs guarantees before signing the agreement.

Powell’s defense at Congress during the week, the long-awaited speech by the President of the United States at the Economic Club in New York will be in the news this week.

UK politics may also come into play given the upcoming elections, also the recent monetary stance of the Bank of England due to Brexit.

RBNZ can keep its rates stable as expected, while conversations for rate cuts can continue, the positivity hovers around the Kiwi dollar as there is a 50 percent chance of a 25 basis point rate cut.

Main Currencies
U.S. Dollar, the Canadian Dollar
The previous week had been positive for the dollar, as it closed at $98,353 with a market gain of 1.15%. Investors may need to relax until Wednesday to obtain statistics that influence the U.S. market since it is assumed that by then the inflation figures for October will be out.

While the impact on the USD is uncertain, it can remain stable to inflation and unemployment claims figures, but retail sales figures can deal a blow to the USD. Canadian dollar can also be affected by the expected speech of the BoC governor.

The dollar can recover, but events can take a turn.

The Canadian dollar closed at C $1.3228 at 0.65% per USD.

Euro, the Japanese Yen
The economic sentiment figures for Germany and the Eurozone will be published on Tuesday, which could face a negative blow to the EUR given the rise in unemployment in Germany and a drop in the ZEW economic sentiment index.

Industrial production figures and GDP figures on Wednesday and Thursday respectively can cause a change of trend for the EUR. The GDP figures that will be published as first and second estimates, while the final figures will come out on Friday can be shocking for the Japanese yen. Besides, the recent monetary stance of the BoJ comes into play.

The EUR and the Japanese yen can recover if the economy according to published figures improves and if inflation figures are low.

The previous week, the EURUSD closed at $1.1018 at 1.33% and the Japanese Yen at 0.99% at ¥109.26/USD.

The Cable, the Australian Dollar
Manufacturing figures for the third quarter of GDP and for September will impact, while commercial inventories and industrial production may have less impact on the cable.

Employment figures, October inflation, and retail sales figures to be published on Tuesday, Wednesday and Thursday will affect the cable, also the Australian dollar. GBPUSD closed at $1.2774 for 1.33%. The Australian dollar ended the week with a 0.59% drop to $0.6863.

Uncertainty Rocks Markets in Asia While Clear Path Elude Investors

Topline: Stocks retraces on gains while Nikkei is almost level

Uncertainty rocks the Asian markets in unobtrusive Friday, just as investors looked for clear path amid an uncommon mild news day for the geopolitical arena.

While talking in Washington on Thursday, Vice President Mike Pence communicated trust in a first-level trade bargain, and stated that the U.S. “will keep on consulting following some basic clarity with China.” Pence gave an instance that China was a “vital and economic opponent,” however and strongly reprimanded its activities to control social equality in Hong Kong and China’s main territory. No new significant trade improvements.

Meanwhile in the U.K., Prime Minister Boris Johnson said he would demand a general political election by December to put an end to the Brexit stagnation, however, it’s unsure on the off chance that he can win the support of Parliament for the election.

With Japan’s Nikkei NIK, +0.22% unable to hold early increases after Trade Minister Isshu Sugawara left office after only a month at work. Sugawara has been tackled in Parliament as of late concerning an embarrassment over sympathy cash purportedly being shared with political decision-makers.

In Hong Kong, Hang Seng Index HSI, – 0.49% crashed by 0.4%, just as the Shanghai Composite SHCOMP, +0.48% reduced by 0.2% and the smaller-top Shenzhen Composite 399106, +0.99% increased marginally. South Korea’s Kospi 180721, +0.11% was almost level, while benchmark indexes in Taiwan Y9999, – 0.21 %, Singapore STI, +0.53% and Indonesia JAKIDX, – 1.38% goes muddled and uncertain. Australia’s S&P/ASX 200 XJO, +0.68% increased 0.6%.

As part of the single stocks, SoftBank 9984, – 1.23% crashed in Tokyo trading, just as convenience store chain FamilyMart 8028, – 1.74 %, while Screen Holdings 7735, +2.63% picked up. In Hong Kong, CSPC Pharmaceutical 1093, +5.66% increased, alongside CNOOC 883, +0.17% , as AAC 2018, – 1.23% and Ping An Insurance 2318, – 3.86% reduced. LG Electronics 066570, – 1.16% crashed in South Korea just as SK Hynix 000660, +3.63% spiked up. Retailer Woolworths WOW, +1.01% picked up in Australia.

Global Recession Averted
Financial analysts and traders are expecting a poor outcome for this income season amid worries about the expensive trade dispute between the U.S. and China, with expanding indications of easing financial development globally.

However, profit releases over the most recent few weeks have for the most part surpassed Wall Street experts’ anticipated results.

As at the previous week, the most significant share markets moved higher aided by commonly positive U.S. income data, generous geopolitical news and the tendency that worldwide economic downturn may not occur,” declared Shane Oliver, AMP Capital Chief Financial Analyst.

The Benchmark raw petroleum CLZ19, – 0.11% plunged 35 cents to $55.88 per barrel. It increased by 26 cents to $56.23 per barrel on Thursday. Brent unrefined petroleum BRNZ19, – 0.03 %, the global standard, lost 37 cents to $61.30 per barrel.
While the dollar USDJPY, – 0.04% was minimal exchanged, also up to 108.65 Japanese yen from 108.64 yen on Thursday.

Asian Markets Higher as Renewed Confidence Is Seen on U.S. – China Trade Accord

The Asian markets are higher today, due to the renewed confidence from news releases on U.S.- China trade negotiations.

The U.S. President Donald Trump had declared recently that the accord with China is going along well. As a result, the markets data jumped higher for the Asian market:

Hong Kong’s Hang Seng Index HSI, +0.23% progressed by 0.2%, the Shanghai Composite SHCOMP, +0.50% was almost neutral, while the Shenzhen Composite 399106, +1.01% increased 0.%. South Korea’s Kospi 180721, +1.16% appreciated by 1.1% and benchmark indexes in Taiwan Y9999, +0.78%, Singapore STI, +0.81% and Indonesia JAKIDX, +0.17% increased marginally.

Australia’s S&P/ASX XJO, +0.30% increased by 0.3%. Japan’s Nikkei was shut for a vacation.

Inside the single stocks, Apple parts producer AAC 2018, +5.75% spiked in Hong Kong, and Geely Automobile 175, +4.69% and Sands China 1928, +2.60% increased also. Samsung 005930, +1.79% and chip producer SK Hynix 000660, +2.06% increased in South Korea, while Rio Tinto BHP, +1.17% and Beach Energy BPT, +1.73% increased marginally in Australia.

On the flip side of the U.S.-China trade negotiations, we had the UK Prime Minister Boris Johnson attempting to prevail upon insubordinate legislators to meet the Oct. 31 Brexit cutoff time for the UK’s exit from EU bloc of about 28 countries.

Other Fundamental Variables Influencing the Market
Meanwhile, a vote throughout the weekend finished with a revision that defers the planned bargain, leaving the circumstance unsure. What’s more, EU authorities have not yet reacted to Johnson’s hesitant solicitation for augmentation of the month’s end cutoff time.

In the interim, Japan detailed that its exports reduced by 5.2% from last year’s data in September as imports fell to 1.5%. The subsequent shortage of 123 billion yen ($1.1 billion) showed poor exports to China, South Korea, and other Asian nations, data released from the customs displays.

Innovation organizations drove the slide, which eradicated the major U.S. index increases from the day preceding. Communication services, industrials, and social insurance stocks likewise crashed, exceeding additions in real estate firms, banks, and other market divisions.

The S&P 500 index SPX, +0.69% crashed to 0.4% as at Friday to 2,986.20. The index is only 1.3% beneath its unbreached high recorded as of July end.
The Dow Jones Industrial Average DJIA, +0.21% reducued to 1% to 26,770.20 and the Nasdaq COMP, +0.91% lost 0.8%, to 8,089.54.

An unlikely scenario about the challenges among Beijing and Washington has been bothering markets. Moderators arrived at a ceasefire a week ago keeping the contention about trade and innovation from heightening more, however, the two sides still have numerous difficulties to settle before arriving at a far-reaching and wider bargain.

Benchmark unrefined petroleum CLX19, +0.19% plunged 10 cents to $53.68 a barrel in electronic trading on the New York Mercantile Exchange. It crashed 15 cents to $53.78 a barrel on Friday. Brent raw petroleum BRNZ19, +0.44 %, the global standard, reduced by 20 cents to $59.22 per barrel.