Forex News 24
  • RSS

news

Asia shares bounce from two-month lows as trade war fears ease

Asia shares bounce from two-month lows as trade war fears ease
админ
05/04/2018

Asia shares - Asia shares bounce from two-month lows as trade war fears ease

Asian shares bounced from two-month lows on Thursday as world equities recovered from a selloff triggered by escalating Sino-U.S. trade tensions, with investors hoping a full-blown trade war between the world’s two biggest economies can be averted.

Sentiment was lifted as the United States expressed willingness to negotiate a resolution to the trade fight after the proposed U.S. tariffs on $50 billion in Chinese goods prompted a quick response from Beijing that it would retaliate by targeting key American imports.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.5 percent, a day after it hit its lowest in almost two months. Trade-dependent Singapore’s Straits Times Index rose more than 2.0 percent.

Japan’s Nikkei gained 1.6 percent while markets in mainland China, and those in Hong Kong and Taiwan, are closed for the Tomb Sweeping Day holiday on Thursday.

U.S. S&P 500 mini futures ESc1 rose 0.4 percent in Asia.

On Wednesday, the S&P 500 gained 1.16 percent and the Nasdaq Composite added 1.45 percent, clawing back heavy losses of more than 1.5 percent right from earlier in the U.S. session.

“I think that the substance of trade restrictions and their real impact will be far less than the headlines,” said Jeffery Becker, Chairman and CEO at Jennison Associates in New York. “U.S. and Chinese cross border trade has grown significantly over the last decade and economic inter-dependence runs very deep, deeper than the actual trade numbers. And both countries have a lot to lose by escalating a trade war.”

Many investors viewed U.S. President Donald Trump’s latest tariffs plan as part of his negotiation strategy, rather than his final policy.

Indeed, Trump’s top economic adviser, Larry Kudlow, when asked whether the latest U.S. tariffs plan may never go into effect and may be a negotiating tactic, told reporters: “Yes, it’s possible. It’s part of the process.” He called the announcements by the two countries mere opening proposals.

The U.S. trade actions will not be carried out immediately, giving the two countries room for maneuver and providing investors with hope of a compromise.

The proposed 25 percent U.S. tariffs on some 1,300 industrial technology, transport and medical products from China now see a public comment and consultation period that is expected to last around two months.

“Our view on the China-U.S. trade situation is that typically, the initial headline is worse than what we expect the implementation to ultimately turn out to be. So our expectation is it will remain a tense situation but will not break out, and to an all out trade war,” said Mike Lillard, chief investment officer at PGIM Fixed Income in Newark, New Jersey.

Many suspect Washington will likely back down on some fronts after Beijing threatened tariffs on U.S. soybeans, the top U.S. agricultural export to China.

It is considered one of the most powerful weapons in Beijing’s trade arsenal given the impact on Iowa and other farming states that backed Trump in the election.

“The U.S. administration will have to tread cautiously considering the risk this could hurt the election prospects,” said Yukino Yamada, senior strategist at Daiwa Securities.

Optimists also argued that the global economy is currently running so strong that it could cope with the impact of the proposed tariffs, which cover a fraction of the world’s trade.

FTSE International3400.95
.STIFT-SE INTERNATIONAL
+61.25(+1.83%)
chartsgen2?symbols= - Asia shares bounce from two-month lows as trade war fears ease
U.S. economic data published on Wednesday underscored the prevailing bullish view on the economy. U.S. private payrolls increased solidly in March as hiring rose across the board, boding well for Friday’s jobs data.

Yet others also cautioned that uncertainties caused by fears of a trade war could result in many companies delaying capital expenditure investments in the near term.

Concerns about trade wars could also hit some specific assets, such as U.S. soybeans Sc1 and corn Cc1. Both products licked their wounds after having fallen 2.2 percent and 1.9 percent, respectively, on Wednesday on China’s trade moves.

Oil prices bounced back in tandem with global share prices, and on a surprise draw in U.S. crude stockpiles.

U.S. crude futures CLc1 traded at $63.71 per barrel, up 0.5 percent.

In the currency market, the recovery in risk appetite helped to boost the dollar against the yen. The U.S. currency changed hands at 106.93 yen, near last week’s high of 107.015.

The euro was little changed at $1.2283, off Tuesday’s two-week low of $1.2254.

The Canadian dollar hit a five-week high of C$1.2745 per U.S. dollar while the Mexican peso held near a six-month high of 18.065 peso to the dollar hit the previous day, both helped by optimism over a NAFTA trade deal.

Source

Related ItemsamericanAsiacapitalChinacurrencycurrency marketeconomicequitieseuroFTSEfuturesHong KongIndexJapanlossesmarketmarketsNew YorkOiloptimismriskrisk appetiteSingaporetradetrade warTrumpU.S. dollarUnited States

Leave a Reply

Cancel reply

Your email address will not be published. Required fields are marked *

Anti-spam: complete the taskWordPress CAPTCHA


news
05/04/2018
админ
Related ItemsamericanAsiacapitalChinacurrencycurrency marketeconomicequitieseuroFTSEfuturesHong KongIndexJapanlossesmarketmarketsNew YorkOiloptimismriskrisk appetiteSingaporetradetrade warTrumpU.S. dollarUnited States

More in news

273116ff712463a8fe797bc26d4bddd2 400x240 - Major policy change for the FED

Major policy change for the FED

админ30/08/2020
Read More
5ecd652efa96beb5e9daab8a81713e20 400x240 - Powell expected to preview Fed’s policy framework

Powell expected to preview Fed’s policy framework

админ27/08/2020
Read More
1cfd53e4dc84605be8f34b32e1fc08ff 400x208 - European markets look defensive

European markets look defensive

админ26/08/2020
Read More
Scroll for more
Tap

Last news

  • 273116ff712463a8fe797bc26d4bddd2 95x60 - Major policy change for the FED
    Major policy change for the FED
    news30/08/2020
  • 5ecd652efa96beb5e9daab8a81713e20 95x60 - Powell expected to preview Fed’s policy framework
    Powell expected to preview Fed’s policy framework
    news27/08/2020
  • 1cfd53e4dc84605be8f34b32e1fc08ff 95x60 - European markets look defensive
    European markets look defensive
    news26/08/2020
  • cbda506728f805be55e3597fd478b623 95x60 - Another record-setting session for U.S. stocks futures
    Another record-setting session for U.S. stocks futures
    news25/08/2020
  • 3c51d052540d35f9b8497fc0b1942d58 95x60 - $50M worth of cryptos or more left China
    $50M worth of cryptos or more left China
    news23/08/2020

Tags

american Asia Bitcoin China cryptocurrency currency Dollar dollar index economic Economists EUR euro Fed Federal Reserve forex futures GBP GDP Germany Index inflation interest rate interest rates Japan losses lost market markets monetary policy Oil price prices rate rates retail rise risk sales trade trade war trading Trump UK United States US

Copyright © 2019 Forex News 24, all rights reserved.

Australia Has A$825 Million Trade Surplus In February
Peering over the cliff: U.S. equity market fragility in six charts