BCN-07, 08 Asian markets struggle as traders await catalysts

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MARKETS-WORLD WRAP

Asian markets struggle as traders await catalysts

HONG KONG, April 9, 2019 (BSS/AFP) – Asian markets struggled Tuesday as
dealers await the latest developments in the China-US trade talks, while
Donald Trump trained his sights on the European Union by threatening tariffs
on billions of dollars’ worth of goods.

With few major catalysts to fire activity, eyes are on an upcoming EU
summit that will decide whether or not to extend the Brexit deadline, a key
European Central Bank meeting and the release of minutes from the Federal
Reserve’s March policy gathering.

Earnings season also kicks off in earnest this week, with expectations low
but observers hoping for some positive forward guidance.

Beijing and Washington have flagged progress in trade negotiations, helping
global markets push to multi-month highs this year, though there have been
few details.

“Global growth concerns are easing as US-China appear to be close to a
deal, but without details and with veiled threats if the deal is not (the)
best, markets are treading carefully,” said OANDA analyst Alfonso Esparza.

In early trade Hong Kong was down 0.1 percent, having ended above 30,000
points Monday for the first time since June, while Shanghai eased 0.5 percent
and Tokyo finished the morning 0.2 percent off.

Seoul and Wellington were also lower, while Sydney and Taipei were flat.
Singapore and Jakarta edged up.

Trading was given a knock by news that the US had threatened levies on up
to $11.2 billion on a host of European products in response to subsidies
received by aircraft maker Airbus as part of a long-running row.

“This case has been in litigation for 14 years, and the time has come for
action,” said US Trade Representative Robert Lighthizer.

The move comes as Brussels and Washington are on the verge of a stand-off
over the auto sector, while Trump has also warned of action against Japan as
part of a multi-pronged trade fight that has shaken investor confidence.

MORE/SR

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BCN-08

MARKETS-WORLD WRAP 2 LAST

– May’s big week –

On currency markets the pound continues to stand its ground despite ongoing
Brexit uncertainty, with Prime Minister Theresa May holding a series of
meetings with EU leaders to win backing for a second delay to Britain’s exit
from the bloc.

The British premier has appealed for the divorce date to be put back to
June 30 and will learn Brussels’ decision at a showdown summit Wednesday.

If the request is denied Britain will crash out on Friday, with analysts
warning of an economic catastrophe for the country if that happens.

However, even if she gets the extension, May is still struggling to get
backing in parliament for the exit deal she agreed with the EU months ago.
Adding to the uncertainty is the fact she is also facing a revolt by pro-
Brexiters within her Conservative Party over her decision to hold talks with
the opposition Labour Party.

Oil prices were barely moved after a recent surge fuelled by increasing
unrest in key producer Libya where there is fear of a civil war as it is
engulfed in violent power struggles between an array of armed groups since
the 2011 overthrow of dictator Moamer Kadhafi.

Both main contracts are around six-month highs, boosted by hopes for the
China-US talks, an output cut by OPEC and non-members including Russia, and
sanctions on Venezuela and Iran.

“It’s very bullish markets when traders not only ignored last week’s
unexpected US inventory builds but completely sidestepped Friday’s Baker
Hughes surging rig count,” said Stephen Innes at SPI Asset Management.

“Usually, this bearish combination would have thwarted the ongoing rally.”

– Key figures around 0300 GMT –

Tokyo – Nikkei 225: DOWN 0.2 percent at 21,722.19 (break)

Hong Kong – Hang Seng: DOWN 0.1 percent at 30,037.72

Shanghai – Composite: DOWN 0.5 percent at 3,228.08

Pound/dollar: UP at $1.3076 from $1.3065 at 2040 GMT on Friday

Euro/pound: DOWN at 86.15 pence from 86.19 pence

Euro/dollar: UP at $1.1265 from $1.1261

Dollar/yen: DOWN at 111.33 yen from 111.49 yen

Oil – West Texas Intermediate: UP one cent at $64.41 per barrel

Oil – Brent Crude: DOWN 10 cents at $71.00 per barrel

New York – Dow: DOWN 0.3 percent at 26,341.02 (close)

London – FTSE 100: UP 0.1 percent at 7,451.89 (close)

BSS/AFP/SR/1940 HRS