Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Market Brief: U.S. Democracy Bill Riles China To Jeopardise 'Phase One' Trade Deal

By City Index (Matt Simpson)Market OverviewNov 20, 2019 06:21
uk.investing.com/analysis/market-brief-us-democracy-bill-riles-china-to-jeopardise-phase-one-trade-deal-200434407
Market Brief: U.S. Democracy Bill Riles China To Jeopardise 'Phase One' Trade Deal
By City Index (Matt Simpson)   |  Nov 20, 2019 06:21
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
Daily % Candles (From Asia Open)
Daily % Candles (From Asia Open)

View our guide on how to interpret the FX Dashboard

FX Brief:

  • China condemned the US “Hong Kong Human Right and Democracy Act” earlier passed by the US senate, and reiterated their commitment to the “one country, two systems” formula. Stating that the US should stop interfering in Hong Kong and China’s affairs, it could be the latest roadblock to the [in]famous phase-1 trade deal.
  • Beijing added more stimulus by cutting their new benchmark lending rates again, a move which was widely expected according to a Reuters poll. Lower funding costs are aiming to bolster a slowing economy amid the ongoing US-China trade dispute.
  • Exports from Japan contracted by -9.2% YoY (-7.6% forecast and -1.6% prior), making it the fastest contraction in 3 years. Not too surprisingly, shipments to US and China also fell. With their economy moving closer to a recession, Japan’s economy minister pledges to provide a ‘sizeable’ economic stimulus package. It also raises the odds of easing from BOJ who are now deciding whether to pull the trigger on a meeting-by-meeting basis.
  • AUD and NZD are the weakest majors, JPY and CHF are the strongest amid a mildly risk-off session. Carry trades such as AUD/JPY and NZD/CHF are the weakest pairs of the session, although volatility has remained contained with most pairs ranging just 50% of their 10-day ATR. Trade-tease fatigue springs to mind….
  • Equity Brief:

  • Key Asian stock markets are all trading in the red today as U.S-China trade related woes have resurfaced via an indirect channel. The U.S. Senate has passed the Hong Kong Human Rights & Democracy Act unanimously that supports Hong Kong anti-government protestors. China has voiced displeasure and raised warning of retaliation that can complicate the negotiation process of ironing out the final parts of the “Phase One Trade Deal” before another tranche of U.S. tariffs on Chinese imports kicks in on 15 Dec.
  • Also, the USD/CNH (offshore Yuan) has continued it inch higher to retest a 5-day high at 7.0430 that has also triggered the current risk off behaviour in stocks.
  • Japan’s exports fell 9.2% y/y in Oct, below consensus estimates of a 7.6% y/y drop that has marked the steepest decline in three years. The lacklustre export data has been driven by plummeting shipments of cars and aircraft engines to U.S. and plastic materials to China.
  • The worst performer as at today’s Asia mid-session comes from one of the significant gainers from yesterday, Australia’s ASX 200 that has dropped by -1.40% and wiped out 3 days of prior gains. Localised factor is in play that has exacerbated the decline where Westpac Banking Corp has been slapped by regulators with 23 million of anti-money laundering breaches that dragged down the entire financial sector. Shares of Westpac Banking has tumbled by -3.24% coupled with significant losses seen in the remaining “Big 3” (CBA -1.67%, NAB -2.31% & ANZ -1.93%).
  • Latest media report according to sources on the mega secondary listing of Alibaba (NYSE:BABA) shares in Hong Kong will be priced at HK$176 per share. In the secondary listing, eight Alibaba’s Hong Kong listed shares will be equal to one Alibaba’s New York listed ADS. Based on yesterday, 19 Nov closing price of Alibaba’s New York ADS (BABA) of US$185.25, Hong Kong’s Alibaba listed price will be at a 2.9% discount to their New York share price in USD terms.
  • The S&P 500 E-mini futures has continued to inch lower in today’s Asian session by -0.14% and printed a current intraday low of 3108.
  • Up Next

  • Canada CPI for Oct out at 1330 GMT – consensus estimates are set at 1.9% y/y and 0.3% y/y for core CPI, a significant lower print may see downside pressure on the CAD that can alter Bank of Canada’s neutral stance on monetary policy where Canada’s policy interest rate has remained unchanged for more than a year.
  • Fed FOMC minutes out at 1900 GMT – In the recent weeks, Fed Chair and several officials have guided market participants towards a “wait and see” approach in terms of monetary policy after three rounds of interest rate cuts. Thus, minutes may not alter the near-term policy outlook on interest rates.
  • Nov 20, 2019 Calendar
    Nov 20, 2019 Calendar

    "Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation, and needs of any particular recipient.

    Any references to historical price movements or levels are informational based on our analysis and we do not represent or warrant that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, nor does the author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions."

    Original Post

    Market Brief: U.S. Democracy Bill Riles China To Jeopardise 'Phase One' Trade Deal
     

    Related Articles

    Market Brief: U.S. Democracy Bill Riles China To Jeopardise 'Phase One' Trade Deal

    Add a Comment

    Comment Guidelines

    We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

    • Enrich the conversation
    • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
    • Be respectful. Even negative opinions can be framed positively and diplomatically.
    •  Use standard writing style. Include punctuation and upper and lower cases.
    • NOTE: Spam and/or promotional messages and links within a comment will be removed
    • Avoid profanity, slander or personal attacks directed at an author or another user.
    • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
    • Only English comments will be allowed.

    Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

    Write your thoughts here
     
    Are you sure you want to delete this chart?
     
    Post
    Post also to:
     
    Replace the attached chart with a new chart ?
    1000
    Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
    Please wait a minute before you try to comment again.
    Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
     
    Are you sure you want to delete this chart?
     
    Post
     
    Replace the attached chart with a new chart ?
    1000
    Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
    Please wait a minute before you try to comment again.
    Add Chart to Comment
    Confirm Block

    Are you sure you want to block %USER_NAME%?

    By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

    %USER_NAME% was successfully added to your Block List

    Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

    Report this comment

    I feel that this comment is:

    Comment flagged

    Thank You!

    Your report has been sent to our moderators for review
    Continue with Google
    or
    Sign up with Email