Will optimism fuel risk appetite?

11 March, 2019

Will optimism over US-China trade negotiations fuel risk appetite?

Financial market sentiment has been evidently jabbed in the past couple of trading sessions by concerns over the downbeat tone delivered by the European Central Bank (ECB) and another round of economic data releases clearly pointing out that the global economy is facing downside risks. 

Therefore, investors really need an air of positive news to inspire some risk appetite back into valuations and there is no better potential catalyst for such a change in sentiment than stronger optimism coming out of the ongoing US-China discussions over a host of different issues. 

Improved bilateral relations between the United States and China is in clear demand right now from investors and headlines, such as the most recent one that they have reached a consensus over many vital issues is extremely positive news for financial market sentiment. 

This is now likely going to be the major theme heading into the next trading week and will hopefully help overshadow what was a past week of resumed concerns over the global economy. 

Investors might not “buy” into this headline right away because quite a lot of US-China optimism has been priced into the market over the past couple of weeks, but optimism is still very much needed for risk appetite to take “the next step” as we conclude Q1. Optimism ultimately concluding in a hopeful signing summit in the next couple of months is the potential trigger for a rally in global stocks, emerging markets and the next round of momentum for emerging market currencies.


Source link  
Gold prices one to watch

Gold prices have managed to achieve a rebound from the sub-$1,290 levels seen earlier this month to challenge $1,305 at the time of writing...

Oil's outlook clouded by potential risks

Oil prices have performed unexpectedly well this quarter, rising roughly 29.5% YTD despite US-China trade developments, global growth concerns...

Fed provide further boost to equities?

U.S. stocks posted their best weekly performance last week, sending the S&P 500 above the critical resistance level of 2,815. Equity bulls may see the break...


Markets on standby in absence of fresh catalyst

Asian stocks traded mixed this morning as investors adopted a 'wait and see' approach due to a lack of fresh catalysts. With much of the...

Dollar dives on Powell's remarks

King Dollar was a step closer to losing its crown yesterday after Federal Reserve Chairman Powell reiterated the Fed's patient policy mantra during...

Pound clings onto Brexit delay hopes

Pound bulls were injected with a renewed sense of confidence this morning following reports that UK Prime Minister Theresa May could delay Brexit...


US-China trade talks resume

Most major emerging market currencies held steady against the Dollar as investors closely monitored high-level trade talks between the United States...

Market mood dictated by US-China trade talks

Stocks across Asia were mostly higher this morning after strong US earnings and cautious optimism over US - China trade negotiations influenced...

'Risk-on' sentiment boosted

There was a collective sigh of relief across financial markets after President Donald Trump hinted that he could extend the March 1 deadline for increasing...

  


Share: