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%
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material 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 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research 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 and quarterly summary.
Seize your opportunity
Deal on the world’s stock indices today.
- Trade on rising or falling markets
- Get one-point spreads on the FTSE 100
- Unrivalled 24-hour pricing
See opportunity on an index?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on an index?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from one point on the FTSE 100
- Trade more 24-hour indices than any other provider
- Analyse and deal seamlessly on smart, fast charts
See opportunity on an index?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
