Asia market morning update - Trump-Xi meeting delay

An April Trump-Xi meeting?

Wall Street concluded the session near neutral with news swivelling of an expected delay to the Trump-Xi meeting. Against earlier expectations of an end-March meeting, officials have been suggesting that a delay would be the case for at least April. Whether this is logistics, or as US trade representative Robert Lighthizer had outlined that there remains ‘major issues’ still unresolved, it is hard to get a read. President Donald Trump had noted that an announcement would be made in three to four weeks. If this is a pre-signing deal, as we know China would like to see following the curve ball thrown during the Trump-Kim summit, it would be a significant one for the markets. As of present, however, this just likely means that we would be kept waiting further on this issue that is obstructing the outlook for markets.

A third Brexit deal vote

Separately, the latest Brexit vote unfolded as expected, pointing to the intention for at least a 3-month delay to the March 29 deadline. As most would have noted by now, the vote is not legally binding and a strong reason would likely be required to convince the EU 27 member states for an extension. Prime Minister Theresa May’s proposal for a third vote on her draft deal looks just to make that happen. However, after two successive rejections, the odds are not in her favour. This could mean the build up of further event risks next week with Prime Minister Theresa May planning to seek the extension at the EU council meeting after her third vote targeted by Wednesday. The no-deal Brexit possibility is still very much present on the table that should induce the intention to seek protection on the downside for the likes of GBP/USD. EUR/GBP break on the downside likewise looks to be fading slightly, one to watch with next week’s event risks in this complex Brexit case.

Asia open

A mixed open seen thus far for Asia markets, with the lack of inspiration keeping most to a state of neutral. The lack of clarity on the Trump-Xi meeting serves as a dampener for markets into the end of the week, though the attention is on the series of items including China’s National People’s Congress (NPC) closing with Premier Li expected to address the crowd. China’s National People’s Congress will also be looking to place their stamp of approval to a new foreign investment law. Amid the various disputes with the US over the likes of intellectual property and technology transfer, the passing of this law is expected to help with ties, and perhaps by a longer shot, the economy. Look to the details for Asia markets. No changes expected from the Bank of Japan (BoJ) though it will be both the forecasts and any views on their policy toolbox that should interest markets.

Yesterday: S&P 500 -0.087%; DJIA +0.03%; DAX +0.13%; FTSE +0.37%