Temporary trade relief for asia markets
Asia markets look set to trail after the US with moderate gains as worries on trade tuned a notch lower through the Thursday session. The attention, meanwhile, is mostly focused upon Friday’s US labour market update for markets.
Trade negotiations in focus
It appears that we have a risk-on mood back in markets with hopes of the US-Mexico trade talks fuelling the onset. Mexico’s ambassador to the US was noted to reflect that negotiations between the US and Mexican officials, which resumed on Thursday, had gone well, while reports on the US contemplating a delay to the tariffs on Mexican goods set for June 10 had also erased some of yesterday’s drag from the issue. It is perhaps not distant memory seeing this kind of back and forth on trade that certainly creates doubts for this relief rally.
Addressing the bigger elephant in the room, the US-China trade issue may have more at stake in the G20 meeting coming up after President Donald Trump expressed that he will be deciding on further tariffs on Chinese goods post the meeting. While it remains to be seen, the President had also mentioned that he will be convening with Chinese President Xi Jinping, perhaps one to watch for signs of a repeat of the last G20 trade truce. The chances are broadly viewed to be slimmer this time, however, given the resolution both sides are showing in holding their grounds.
The intraday influence from this lightening of the mood surrounding trade tensions had nevertheless been one to inspire gains for Wall Street and even crude oil prices alike. The S&P 500 index can be seen back above its 100-day moving average in this reversal, though as said above, this is the reflection of a temporary relief and would require something more concrete to continue the trend. Focus on the US labour market data on Friday, as suggested yesterday, whereby any signs of disappointments similar to the ADP reading may build expectations for the Fed to shift interest rates lower given their mandates to look after employment and prices for the economy.
Source: IG Charts
Asia open
Lighter volume could be seen in the day with various Asia markets including the likes of Hong Kong, China and Taiwan being away while Indonesia remains so until next week. Early movers had as expectedly tailed the US in gains as can be seen with the ASX 200 and Nikkei 225’s 0.4% upsides. Amid a light data day for Asia, focus on the labour market update.
Meanwhile the temporary relief spreading across markets at present had provided USD/JPY (大口) with some support, but the risks may nevertheless be attuned to the downside. Read more on our view here.
Source: IG Charts
Yesterday: S&P 500 +0.61%; DJIA +0.71%; DAX -0.23%; FTSE +0.55%
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
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. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Take a position on indices
Deal on the world’s major stock indices today.
- Trade the lowest Wall Street spreads on the market
- 1-point spread on the FTSE 100 and Germany 40
- The only provider to offer 24-hour pricing
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.