Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

Asia morning update - resistance ahead

Growth concerns persist within markets weighing down on US futures and European bourses. Having digested the Chinese data on Monday, however, the vacuum of fresh leads is apparent for Asia markets, due to tread water in the day.

Source: Bloomberg

Eager for US-China trade talk progress

The two fresh news that had arrived on the trade front had been reports detailing the difficulties on intellectual property issues during the early January US-China talks, followed by what had been touted as an unusual party address by Chinese President Xi Jinping on ‘serious dangers’.

While retrospective, the IP issues report certainly works against the slew of tariffs easing talks that had encouraged markets of late. Alongside China’s slowest growth performance seen since 2009 reported yesterday, these had been touted as reasons undermining the performance of US futures and European bourses on Monday. This back and forth on US-China trade relations certainly should not come as a surprise as uncertainty swirls ahead of the next round of US-China talks, one of paramount importance not just for regional but the global economy as its implications run wide. We have notably also had the International Monetary Fund (IMF) slashing their global growth forecast for 2019 and 2020 to 3.5% and 3.6% respectively, both from 3.7% in October last year. Coming ahead of the heating up of talks in the World Economic Forum at Davos, this may well induce further topics and rhetoric urging conciliation between the two sides, thus potentially giving us more to watch amid a light Tuesday.

All the above said, reports had also outlined a meeting between top leaders in China convened by President Xi Jinping, urging efforts to ensure political stability as ‘major risks’ mounts. While reflecting the concerns from authorities, such an occurrence could perhaps be seen as a reflection of the eagerness to see success in upcoming US-China trade talks as well, as we look to the Washington meeting next week.

Tuesday markets

Against the backdrop of refreshed woes over growth and US markets having been away for the Martin Luther King Jr. day, there leaves little to inspire Asia markets. Likewise for crude prices trading little changed from Monday. Early movers in the region were seen in mild red this morning across the likes of the ASX 200 and the Nikkei 225.

The caution would be for pressure across the likes of the Hang Seng Index and the Straits Times Index as prices broach resistance levels. The rally within consolidation since the start of January had largely presented the anticipation from the markets to see a deal being established between US and China. With the lack of concrete details, it would be a challenge for the two indices to breakout on the upside, thus do watch for rejection with this lack of fresh impetus.

Hong Kong HS50 Cash (HK5)

Yesterday: S&P 500 +1.32% (Friday); DJIA +1.38% (Friday); DAX -0.62%; FTSE +0.03%


The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

See your opportunity ?

Seize it now. Trade over 17 000 markets on our award-winning platform, with low spreads on indices, shares, commodities and more.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.