Xi Jinping provided equity bulls a boost

10 April, 2018

 

 

Appetite for risk bolstered Tuesday morning, as Chinese President Xi Jinping offered plans to further open up the second largest economy. Xi’s public speech at the Boao Forum came days after the U.S. and China exchanged tit-for-tat tariffs threats, which kept investors on edge for several weeks. He promised to lower import tariffs for autos, as well as on some other products, open up the financial and insurance sectors, and most importantly, to increase protection to intellectual property.

Xi’s speech calmed markets by responding to all of Donald Trump’s concerns, without even mentioning him. Now it’s time for China to provide specific figures and a timeline on how these reforms will be implemented. I think what was achieved today is likely to reduce trade tensions and buy some extra time. Whether the U.S. will wave back with an olive branch to China remains to be seen, but certainly, the probability of a full-blown trade war is now much lower than a week ago.

Asian equities were all in the green this morning with the Hang Seng Index and Nikkei 225 climbing more than 1%. Futures are also indicating a positive start to Europe and U.S. – the S&P 500 futures are up 1.3% at the time of writing.

However, the new geopolitical risks over the increased conflict in Syria cannot be ignored. This came after the U.S. imposed a wide range of financial sanctions on Russian assets, causing stocks to suffer their worst performance in four years and the ruble falling as much as 4.1%.  Russia warned the U.S. that any military reprisal to Saturdays’ chemical attack in Syria could have “grave repercussions”. Will U.S. and Russia go into a confrontation in Syria? This likely depends on Trump’s decision over the next 24 hours, but the risks are high.

Although oil prices may have risen on hopes that trade tensions will ease, investors may start pricing in a much higher risk premium. So far, it seems the conflict in Syria has no impact on the supply from the Middle East, but if the battle spills outside the Syrian border, I expect another $10 risk premium to be added to the current price.

The economic calendar is light today, so expect currency traders to continue taking the cue from equity markets.


Source link  
Investors cautiously optimistic

Asian equities were trading mixed on Monday after a nervous last week which saw wild swings in global equities and emerging market currencies...

Greenback falls on trade talks

The Dollar Index retreated from its 2018 peak of 96.98 following news that China will resume trade talks with the U.S. later this month. The news allowed...

Turkish crisis spreads into markets

The Turkish Lira resumed its drop early Monday touching a new record low of 7.21 per dollar before recovering slightly during Asia trade. Comments from...


Stocks surge amidst USD weakness

The major winner today was the US stock market as it continued to surge higher on corporate earnings and an upbeat jobs report as JOTLS openings came in strong...

Is Trump truly winning the trade war?

Escalating trade tensions between the U.S. and China remain the financial markets hottest topic. President Trump seems to be celebrating...

BoJ unwilling to shift gears yet

After weeks of speculation that the Bank of Japan may begin to adjust its stimulus program, the central bank once again decided not to join the global trend...


Oil and equities jump on global events

Oil is back on the move again after the recent attack against a ship off the coast of Yemen carrying oil. The Saudis have suspended shipping around that area until the...

USD and Oil in focus

The USD lifted again against all majors, as US retail sales m/m came in strong at 0.5%, in line with expectations. At the same time the previous month was...

Investors in cautious mode

Global equity and foreign exchange markets were relatively quiet on Wednesday as the U.S. financial markets were closed in observance of Independence Day...


In the past 24 hours Bitcoin has lost -2.63% and reached $6337.89066554. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has gained 0.2108% and is now at $1.1431. Start trading and making money on Forex today.

In the past 7 days Ethereum has gained 2.48% and is now at $278.396137316. Have the most popular cryptocurrencies compared online 24/7.


Top Brokers offering Forex Market Analysis



Forex Currencies Forecasts



Top 10 Forex Brokers 2018

# Broker Review
1easyMarketseasyMarkets89%
2FXTMFXTM87%
3HYCMHYCM85%
4FxProFxPro80%
5FIBO GroupFIBO Group77%
6FXCMFXCM73%
7AvaTradeAvaTrade68%
8HotForexHotForex67%
9Alfa-ForexAlfa-Forex66%
10XMXM66%
  


Share: