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Asian investors tread uneasily as trade hopes dim
HONG KONG, Aug 28, 2019 (BSS/AFP) – Asian markets swung Wednesday, gripped
by uncertainty over the China-US trade talks, with warnings that Donald
Trump’s unpredictability could be harming the chances of an eventual
agreement.
Trading has been volatile this week after the president’s weekend outburst
against Beijing and announcement of more tariffs on $550 billion of goods was
followed Monday by him saying the two sides had spoken by phone and
negotiations would resume soon.
However, China has not confirmed such calls had taken place, while media
in the country has played down the chances of more talks and the leadership’s
need for a deal.
The developments are the latest in a series of moves by the White House
that have seen it slam China and then hold out an olive branch.
But Stephen Innes at Valour Markets said: “There remains a high degree of
scepticism regarding the sincerity of Trump’s comments or even if the Chinese
are willing to recommence negotiations.”
He pointed out that an inflammatory tweet on Friday in which Trump
labelled Federal Reserve boss Jerome Powell and China’s Xi Jinping enemies of
the US had resonated among traders.
“Risk-off remains in vogue as trade disputes continue to flare, suggesting
any risk assets recovery will remain extremely fragile.”
The editor of the state-run Global Times said in a tweet that Beijing was
“not putting so much emphasis on trade talks”, instead focusing on boosting
the economy, and it was becoming tougher for the US to apply pressure.
– ‘Large grain of salt’ –
“A four-word disclaimer, ‘large grain of salt’, on any presidential
pronouncements would probably do wonders for reducing the whipsaw volatility
of the last week,” said Jeffrey Halley, senior market analyst at OANDA.
Worries about the outlook continue to dim, with the yield on two-year
Treasury notes rising above those for 10-year notes, which is a widely
accepted sign a recession is likely.
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In share trading Hong Kong and Sydney each edged up 0.1 percent, Tokyo
ended the morning 0.2 percent higher and Seoul was 0.6 percent. Singapore was
flat, Taipei added 0.5 percent and Wellington jumped 0.9 percent.
Manila and Jakarta were up but Shanghai fell 0.4 percent.
China’s yuan edged up slightly after a recent sharp sell-off but it
remains lodged around 11-year lows.
Oil prices built on Tuesday’s surge that came in response to figures
showing US stockpiles dived more than 11 million barrels last week, lifting
hopes for demand and offsetting worries about the impact of the trade war.
Also providing support was Iranian President Hassan Rouhani’s call for the
United States to lifting all sanctions against before he would meet Trump,
after the US leader had said he would be open to talks.
The Islamic republic’s foreign minister said the chances of a face-to-face
were “unimaginable”, meaning there was little chance of a thawing of tensions
that would see the return of Iranian oil onto markets.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: UP 0.2 percent at 20,486.99 (break)
Hong Kong – Hang Seng: UP 0.1 percent at 25,700.11
Shanghai – Composite: DOWN 0.4 percent at 2,891.08
Euro/dollar: UP at $1.1089 from $1.1083 at 2100 GMT
Dollar/yen: UP at 105.80 yen from 105.77 yen
Pound/dollar: DOWN at $1.2280 from $1.2288
Euro/pound: UP at 90.30 pence from 90.25 pence
West Texas Intermediate: UP 56 cents at $55.49 per barrel
Brent North Sea crude: UP 39 cents at $59.90 per barrel
New York – Dow: DOWN 0.5 percent at 25,777.90 (close)
London – FTSE 100: DOWN 0.1 percent at 7,089.58 (close)
BSS/AFP/HR/1015