AUD, NZD Hit Recovery After Chinese Top Official Expresses Optimism Amidst Caution in Ongoing Trade Talks

There have been so many speculations about the ongoing trade talks between the United States and China. The worries heightened when the US passed a bill to support human rights in Hong Kong while also passing a second bill to stop the export of certain ammunitions to the Hong Kong police. This move didn’t go down well with China who issued a warning to the US to steer clear of its affairs.

Bearish sentiments took hold of the market when reports filtered in that the trade talks between the two macro economies have reached a stalemate. This was deduced from President Trump’s refusal to remove certain tariffs on Chinese goods while also threatening increased tariffs in case of a failed pact. The quantity of United States agricultural produce bought by china has also sparked up concerns.

Investors were neither sure of when the preliminary deal may be signed; reports gathered from inside sources at the white house said it might be moved to next year because China needed some reassurance on tariffs removal. A publication however quoting sources close to the white house reported that the trade talks have reached a deadlock.

Hopes were lighted again when in a Bloomberg interview, Chinese Vice Premier expressed optimism amidst caution as regards the ongoing trade talks between the two countries. He, however, added that certain ambiguities masked United States’ demands.

In the news wake, Australian and New Zealand dollar versus USD pairs started to hit recovery. At the time of this report, AUD versus USD stood at 0. 6798, recovered from a low price of 0 .6786 to stand at -0.05%. NZD versus USD traded at 0 .6413 edging higher from a low price of 0.6397 while standing at-0.07%.

On Wednesday, bearish sentiments had taken a hold of the AUD, NZD/USD pairs over the trade talks gridlock. The trend continued early Thursday and paused as both pairs held steady when the tensions about the trade deal seemed to douse for the moment.

Trading Currecies

Market Analysis
The recent market situation as could be seen from the Japanese Yen and gold price in the early hours of today shows that heightened concerns over gridlock in the trade talks may have been unnecessary.

The slight bounce experienced by the AUD, NZD versus USD pairs also corroborates that the heightened concerns may have come too early.

Again the veracity of the reports which came in about the gridlock in the trade deal is questionable as the sources remained anonymous. A Shanghai trader said such reports are distractions while referring to the fact that the trade talks terms remain the same. He also made mention of the air of uncertainty hovering in the market causing a drag in trading.

Euro Rises Ahead of Optimism in Trade Talks

In the news this week is the report filtering in about the progress made in US-China trade talks over the weekend. Reports indicate a video conferencing between top US trade officials and a Chinese top government official over the weekend. Though the details of the conference call are yet to be finalized, this has sparked up hopes in investors propping up the Euro, undermining the safe havens.

At the time of this report, the euro edged higher than 1.1072 versus the USD while consolidating its gains. The trade war which had lasted close to 16 months had both countries slapping tariffs on their respective goods. Reports, however, came in a few weeks ago that both countries were nearing a preliminary phase agreement. The progress seemed to be made in the trade talks was stalled as US President revealed it wasn’t removing some punitive tariffs. Investors were unsure of when the preliminary deal will be signed as China needed a bit of reassurance.

On Friday, the US commerce secretary made optimistic remarks while over the weekend, reports came in of a constructive talk between US-China top officials. Though the final decision by the US president, Donald Trump is yet to be heard, investors eagerly await the President’s tweet later in the day.

One question for sure on the mind of investors is if the President is willing to remove the extra tariffs? Also because of the December 15 deadline posed by the US for the preliminary phase agreement to be reached, in which Trump had threatened increased tariffs if it fails is an item to consider in which it seems that the United States stance still holds steady.

Also in the market highlights for this week is central bank activity.

Central Bank Activity
A top official of the Federal Reserve has reiterated that the Fed’s decision to hold steady its interest rate cut after embarking on a three-time cut this year is supportive of the US economy. Later on this week, minutes of a follow-up meeting to explain the Fed’s monetary stance will be released.

Also this week, speeches from ECB top officials are on. Those to influence the market will most likely be Luis de Guindos who is currently serving as the Vice president and Phillip lane who is the Chief economist. Most likely the subject of discussion will be a clarion call to the governing bodies to cover more grounds.

In the news last week, Germany barely escaped a recession, therefore it is expected that fiscal decisions may hold steady in light of this.

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.

U.S.-China Trade Deal: European Markets Get a Wild Run Four Years in a Row

After reports of a preliminary agreement been reached by the two largest economies, China and U.S broke out; the bulls tested European markets in which it reached the 2015 peak.

Recall in the last 16 months, the U.S. and China had been in a trade war in which both countries slapped tariffs on their respective goods. Following an announcement by China that both countries were nearing a preliminary agreement in which the extra tariffs imposed will be removed, European markets had a climb in which it reached a four year high.

The preliminary agreement talks had been ongoing for two weeks spurred both countries agreeing to remove tariffs on goods worth billion dollars and this led to the pan-European Stoxx 600 peaking by 0.4% in early trade to reach a four year high.

Basic resources, autos and travel, and leisure stocks peaked more than 1% as most sectors and major bourses recorded a bullish trend. Utilities and telecoms had a backdrop of 0.6%.

However, inside sources reveal that the preliminary agreement may not come sooner as speculated as China is still scouting for a location where the preliminary agreement would be signed. Most speculations reveal that December is the most likely date as the location search seems to be a hurdle to it coming fast, while London is believed to be a possible location.

Investors who had been optimistic about the awaited preliminary deal in that it may be a boost for the global economy had speculated its signing early November.

However, on the Asia side, events took another turn as MSCI’s broadest index of Asia-Pacific shares, excluding Japan, slid by 0.3%, while most indexes held steady.

In Europe, the apex bank, the Bank of England is holding decisive meetings on slashing its interest rate however speculations indicate it might hold steady its interest rates given the on-coming elections in December.

Giant telecom outfit, Siemens and others like Commerzbank and Unicredit reported their quarterly corporate earnings which were the week’s market highlight.

Corporate Earnings
This was the week’s highlight as Siemens made known its 4th quarter earnings of 24.5 billion euros with an 8% yearly increase. Commerzbank recorded a 35% net profit increment in the 3rd quarter.

Early trades report shows that Siemens and Lufthansa rose above 3% and 6% respectively while Commerzbank slid by 2% with Arcelormittal, largest steelmaker topping the chart with 8%. On the other end, ProSiebenSat.1 shares dropped by 7% following negative media speculations.

Unicredit rose by 4% with a net profit of 1.1 billion Euros for the 3rd quarter, Lufthansa followed the positive trend by rising by 4% capturing a net profit of 1.15 billion Euros. Vestas Wind topped the 3rd quarter earnings chart with a 7.7% increase while Tate&Lyle had a 7.4% increment.

U.S.-China Trade Deal Impacts Positively on USD, Australian Dollar Holds Firmly

The dollar had a slight bounce after a ray of optimism following speculations of a preliminary agreement been reached in the U.S.-China trade talks. There seems to be progress made in the talks between the two countries as the U.S. is considering dropping some tariffs on Chinese goods, a report says.

The trade war which has been ongoing for a year and 4 months had inclined chances of a global recession as both countries in this tussle had increased tariffs on their respective goods. China, on the other hand, is seeking a location where the preliminary agreement will be signed with the U.S. President.

The dollar being paired rose by 0.17% to 108.77 Chinese Yen leading to a 0.4% market gain on Monday. It is been anticipated that any progress made in the trade talks will impact positively on the U.S. dollar and other risky assets. It will also alleviate the concerns about a global recession and also the need for quantitative easing which involves pumping liquidity into the economy will be lessened.

Dollar’s Continuous Growth
A banking executive in Tokyo analyzing the impact of the trade talks on the market says that the atmosphere in the market is still tensed and investors are still cautious. He also predicted the dollar’s growing trend will be continuous as long as progress is been made on U.S.-China trade talks.

The dollar rose 0.17% to 0.9895 Swiss francs, leading to a 0.2% market gain previously.

The dollar index against a pairing of six major currencies rose 0.1% to 97.599, the highest in almost a week.

Although the Federal Reserve has embarked on a three-time interest rate cutting this year, investors still hold hopes of a better economy not as that predicted.

Upcoming this week is the U.S. ISM non-manufacturing report which will also impact the U.S currency.

On the other hand, the Yuan was insignificantly moved by the positivity on the U.S.-China deals as it remained at 7.0276 against the dollar while it edged a little to 7.0255/USD.

This could also be traced to the fact that for the first time in three years, the People’s Bank of China slashed the interest rate on its medium-term lending facility with its intention to spur up the economy.

Safe havens currency, yen, and the Swiss franc experienced losses due to the ease of risk-taking by investors.

The Australian dollar maintained $0.6884 but rose by 0.15% to 74.92 yen.

This could be traced to the Reserve Bank of Australia, (RBA) stance on monetary policy which remains the status quo. The apex bank had been concerned about consumer spending thereby letting its cash rate slide to as low as 0.75 while reiterating that it may remain so for some time.

Trade Optimism Raises Risk Sentiment as Soft Dollar Gives Gold a Push

Toplines:
In the wake of plunging 0.2% prior in the session, spot gold was stable at $1,512.93 per ounce

Up 0.2% at $1,514.80 per ounce was U.S. gold futures

The price for gold was stable early Monday as the greenback eased on light manufacturing survey, while indications of a U.S.- China economic bargain getting past this time charged risk sentiment, topping gains for the safe-haven bullion.

Spot gold was consistent at $1,512.93 per ounce, starting at 0254 GMT, in the wake of plunging 0.2% before the session, as U.S. gold futures went up 0.2% at $1,514.80 per ounce.

Last Friday, China and U.S. stated they agreed as regards planned talks for the settlement of trade disputes dating back to almost 16 months which has hurt the worldwide economy, while U.S. authorities said a bargain could be reached in the present month.

Further optimism was seen on the market through the economic data released last week which softened misgivings about a downturn powered by the long term which has drawn trade dispute between the world’s two largest economies.

In the most recent expansion, job growth in the U.S. reduced as not exactly expected in October, while hiring in the earlier two months improved than recently assessed, information from the Labor Department displays.

Weak Dollar Supports Gold Rise
Temporarily, the sentiment on the market seems so reasonably useful for speculators to focus on gold,” declared Margaret Yang Yan, a market specialist at CMC Markets, including that a more fragile dollar is restricting losses in gold.

The greenback had attempted to rebound on Friday after U.S. payrolls exceeded results, in any case, it was not effective due to a low manufacturing survey that made it seem substantial.

Versus a bunch of fiats, the greenback was hooked at 97.218 having hit a three-month low at 97.107 as of Friday. It was currently focusing on the August trough of 97.033.

In any case, in the medium term to long term, there exists uptrend for gold while the U.S. Fed is required to cut rates one year from now to fortify the economy and lift confidence in the market, before the elections in the U.S., Yan included.

A week ago, the Fed reduced rates for a third time this year, however, motioned there would be no further decreases except if the economy gets ugly.

Shares in Asia increased to 14-week highs on Monday, as positive optimism on U.S.- China trade discussions and positive job data in the U.S. supported worldwide speculators’ desires for more risky assets.

Spot gold may test an obstruction at $1,519 per ounce, a break past this level may prompt a move to $1,534.

Meanwhile, in Europe, the recent Chief of the European Central Bank (ECB), Christine Lagarde will give her initial speech on the job as the markets anticipate she will adhere to a simple policy outline left by her antecedent, Mario Draghi.

Between different metals, silver increased 0.2% to $18.12 per ounce, platinum spiked 0.7% at $952.59 per ounce, as palladium went up 0.3% to $1,811.23.

A Principled Agreement Acknowledged by the United States and China After the Current Week’s Trade Talks

On Friday the Department of Commerce for China expressed that Vice Premier Liu He had a phone call with United States trade negotiators, Robert Lighthizer and Treasury Secretary Steven Mnuchin. The different sides together had real and gainful chats on fundamental trade questions and discussed plans for the accompanying round for a deal.

Pronouncing the current week’s trade arrangement reports, China expressed that genuine and helpful chats on basic trade issues had concurred for the following round of talks.

While reporting on Friday, China pronounced it arrived at an agreement with the United States on a fundamental level after a telephone call between high-level trade negotiators this week.

VP Liu He of the Peoples Republic of China on Friday spoke on the telephone with Robert Lighthizer and Steven Mnuchin, pronounced the Chinese Ministry of Commerce.

The White House said in an announcement Friday that the trade negotiating group has gained ground in an assortment of territories and are settling extraordinary issues, and discussions will proceed at the deputy minister level.

The White House likewise announced that the trade negotiating group has gained ground in different zones and are unraveling the exceptional issues.

Phase One Trade Deal
A few Wall street have shown fears in respects to the phase one bargain, announcing that it just means a little area of the trade deal as visualized by Trump at first.

The Phase one trade deal implies around 60 percent of a more drawn out term deal expressed President Trump. In the interim, an investigation released on Thursday shows that the unassuming attitude of President Trump makes China question the decision of a more extensive trade deal with the United States.

A phase one trade deal that tries to settle and stop tax acceleration and China’s acquisition of US agricultural items was entered between the United States and China which stands as the underlying degree of concluding a deal.

As of Thursday, the United States President Trump declared that another scene for signing the constrained deal will be made known not long after public outrage challenging transport fares disorganized the underlying meeting.

Dollar Plunges on Improved Trade Confidence, as the Fed Meet

The U.S. dollar fell on Monday as improved trade confidence that the U.S. furthermore, China may agree to a trade bargain diminished interest for save haven fiats, and as financial specialists watch out for the Federal Reserves meeting this week.

U.S. President Donald Trump stated on Monday his intentions to sign a large portion of the trade bargain with China earlier than expected yet didn’t expatiate on the period. The remarks come after the U.S. Trade Representative’s office and China’s Commerce Ministry declared on Friday that the U.S. furthermore, Chinese authorities are “near finishing” a few portions of a trade bargain, while discussions proceed.

The trade disputes between the U.S. and of course, China are said to be responsible for causing worldwide financial instability, which thusly has incited national banks universally to cut rates.

While good trade toplines keep on supporting our view that trade strains are fading out stated Win Thin, worldwide head of FX strategy at Brown Brothers Harriman.

The U.S.dollar index versus a group of six significant fiats plunged 0.07% to 97.765. The greenback increased by 0.19% versus the Swiss franc to 0.9962. The Australian dollar, which is exceptionally delicate to the Chinese economy, increased 0.07% to $0.6827 U.S. dollars.

Major Focus on Expected News
Expectations that Britain may agree at a bargain to exit the European Union, and keep away from a messy exit, likewise supported risk sentiment on Monday. The European Union on Monday consented to a 3-month adaptable postponement to Britain’s takeoff from the coalition as Prime Minister Boris Johnson pressed for a political election after adversaries constrained him to demand a postponement he had promised never to request.

The U.S. most important factor is this week’s Federal Reserve meeting. The U.S. national bank is likely to reduce rates when it ends up its two-day meeting on Wednesday, however, speculators will look for any sign that further cuts are crucial. Fed policymakers are profoundly isolated on whether the U.S. national bank should keep cutting rates.

There’s as yet a terrible area of inconsistency and vulnerability in the business sectors about what the Fed will do one year from now, said Jane Foley, senior FX strategist at Rabobank.

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.