{"id":147546,"date":"2019-05-13T06:55:07","date_gmt":"2019-05-13T10:55:07","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=147546"},"modified":"2019-05-13T06:31:51","modified_gmt":"2019-05-13T10:31:51","slug":"markets-on-tenterhooks-awaiting-next-us-china-trade-development","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/05\/markets-on-tenterhooks-awaiting-next-us-china-trade-development\/","title":{"rendered":"Markets on tenterhooks awaiting next US-China trade development"},"content":{"rendered":"
May 13, 2019<\/div>
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Article by ForexTime<\/a><\/strong><\/p>\n

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US-China trade tensions are expected to continue being the dominant theme this week, as Asian markets kicked off Monday in risk-off fashion. Except for the Japanese Yen, most Asian currencies are now weaker against the US Dollar. The Shanghai Composite Index opened 1.5 percent lower before paring losses at the time of writing, as most Asian equities also declined on Monday morning. Meanwhile, S&P500 futures are now down one percent, potentially adding more pain to US stocks which last week saw its biggest weekly decline so far in 2019.<\/p>\n

Over the weekend, US President Donald Trump offered mixed signals regarding his approach to trade negotiations with China. On one hand, he tweeted that talks will continue in a \u201ccongenial\u201d manner, with \u201cabsolutely no need to rush\u201d. On the other hand, he also said he loves \u201ccollecting big tariffs\u201d and told China to \u201cact now\u201d. The tweets came amid reports that US trade negotiators gave their Chinese counterparts a one-month deadline to reach an accord or risk having US tariffs imposed on all Chinese imports.<\/p>\n

Markets\u2019 base case on shifting sands?<\/strong><\/p>\n

Given Trump\u2019s unpredictability, attempts to predict the end result of US-China trade talks risk placing any base case on shifting sands. At the time of writing, markets are still waiting for details on China\u2019s \u201ccountermeasures\u201d to the higher US tariffs imposed on the $200 billion worth of Chinese goods on May 10. Keep in mind that President Trump has also cited the possibility of a 25 percent on a further $325 billion of Chinese goods that are currently tariff-less. While it appears that some market participants are still holding out for some form of a formalized US-China trade deal, last week\u2019s selloff from risk assets could set markets up for more trade-related volatility ahead.<\/p>\n

Potential deviations for US, China economic trajectories may add to market uncertainty<\/strong><\/p>\n

Besides commentary from either government on the trade front, investors will also keep a close eye on major economic indicators out of both the US and China this week. The respective sets of industrial production and retail sales data out of both countries are due Wednesday, set against the backdrop of re-emerging tensions between the world\u2019s two largest economies. The US economic growth momentum is expected to remain steady, while China has been showing signs of stabilizing in recent months; any significant deviation from those trajectories may add another layer of uncertainty to markets.<\/p>\n

Safe havens strengthen as Trump tells China to \u201cact now\u201d<\/strong><\/p>\n

While Trump has asked China to \u201cact now\u201d, investors didn\u2019t have to wait for such a call from the US President before taking risk\u00a0off the table. Gold is now holding around the mid $1,280 while the Japanese Yen is strengthening, with USDJPY falling further below the 110 level. Meanwhile, the Dollar index (DXY) is steadying around the 97.3 level at the time of writing, having wrapped up two straight weeks of declines.<\/p>\n

A lack of progress in the US-China trade impasse should create a supportive environment for safe haven assets, while a major deterioration in tensions could see a major upwards move for the likes of Bullion and JPY.<\/p>\n

Asian economies to brace for further global trade slowdown<\/strong><\/p>\n

For the week ahead in Asia, Singapore and Indonesia are set to release their respective external trade figures for April, amid ramped-up trade tensions between the US and China. The higher barriers to trade, coupled with the slowdown in the global economy, have weighed on Asian economies as exports have posted declines since 2018. As markets brace for China\u2019s \u201ccountermeasures\u201d to the US tariff hike, along with potentially more US tariffs in the pipeline, trade-dependent Asian countries may have to brace for a further slowdown in exports, while becoming more reliant on domestic consumption to prop up growth momentum.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

Disclaimer: <\/strong>The content in this article comprises personal opinions and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/em><\/p>\n<\/div>\n

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\"Forex-Time-Logo\"Article by ForexTime<\/a><\/span><\/strong><\/p>\n

ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Article by ForexTime US-China trade tensions are expected to continue being the dominant theme this week, as Asian markets kicked off Monday in risk-off fashion. Except for the Japanese Yen, most Asian currencies are now weaker against the US Dollar. The Shanghai Composite Index opened 1.5 percent lower before paring losses at the time of […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-147546","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/147546","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=147546"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/147546\/revisions"}],"predecessor-version":[{"id":147570,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/147546\/revisions\/147570"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=147546"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=147546"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=147546"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}