Asian equities lost steam, as optimism over US-China trade softens. Japan’s Nikkei 225 is closing at -2.39% while Australian ASX 200 and South Korean KOSPI indexes closed at -1.01% and -0.12% respectively. Hong Kong’s Hang Seng improved by +0.29% while China mainland CSI 300 gained +0.21%.
Investors are realising that US-China relations have a long way to go. Tariffs of 25% on over USD 200 billion of Chinese imports are on the way. Chinese authorities are expected to send its negotiators as early as next week while US Trade Representative Robert Lighthizer is gearing up to represent the White House.
On the agenda are: reduction of Chinese auto tariffs against US manufacturers (currently: 40%); purchase of US agricultural products; Chinese industrial subsidies; and intellectual property practices.
Peoples Bank of China Governor Yi Gang confirmed he will support the Chinese economy by further monetary policy easing. This will allow the Chinese Renminbi to recover slightly, which lowers the risk of further capital outflows.
USD/CNY has lost 1.72% this week, trading at 6.8408 and approaching 6.8350 short-term.
Disclaimer: While every effort has been made to ensure that the datat quoted and used for the research behind this document is reliable, there is no guarantee that it is correct, and Swissquote Bank and its subsidiaries can accept no liability whatsoever in respect of any errors or omissions, or regarding the accuracy, completeness or reliability of the information contained herein. This document does not constitute a recommendation o sell and/or buy any financial products and is not to be considered as a solicitation and/or an offer to enter into any transaction. This document is a piece of economic research and is not intended to constitute investment advice, nor to solicit dealing in securities or in any other kind of investment.
Although every investment involves some degree of risk, the risk of loss trading off-exchange forex contracts can be substantial. Therefore if you are considering trading in this market, you should be aware of the risks associated with this product so you can make informed decisions prior to investing. The material presented here in not to be construed as trading advice or strategy. Swissquote Bank makes a strong effort to use reliable, expansive information, but we make no representation that it is accurate or complete. In addition, we have no obligation to notify you when opinions or data in this material change. Any prices stated in this report are for information purposes only and do not represent valuations for individual securities or other instruments."
By Vincent Mivelaz