|Day's range||6,167.30 - 6,201.50|
|52-week range||5,410.20 - 6,373.50|
Some of the optimism over the timing of the US-China trade deal was dampened on Thursday after President Donald Trump said the U.S. will probably know in the next three or four weeks about a possible trade deal with China.
Investors bought stocks aggressively on the opening after U.K. lawmakers rejected the idea of leaving the EU without a deal in place under any circumstance. The weakness in China’s Shanghai Index indicates traders were disappointed by the news that growth in China’s industrial output fell to a 17-year low in the first two months of the year, pointing to further weakness in the world’s second-biggest economy.
The early price action in the Asian markets suggests investors aren’t too concerned about the U.S. labor report, however, the upside may be limited because of worries over China’s economic slowdown. Asian market investors may be keeping their powder dry ahead of Wednesday’s big report day when the world’s second largest economy reports on Fixed Asset Investment, Industrial Production, Retail Sales and Unemployment Rate.
Some also believe that investors are pricing in the possibility that Trump may back away from a deal like he did during the U.S.-North Korean nuclear negotiations last week in Viet Nam.
Optimism over a trade agreement between the U.S and China provided a boost for risk appetite at the start of the week. The economic calendar is light.
The major stock indexes in Asia are under pressure on the news that the summit’s schedule had been cut short. South Korean stocks were hit the hardest.
Investors typically don’t like uncertainty and may use the concerns over the lack of details from the trade negotiations as an excuse to book profits and reduce exposure over the near-term. However, this won’t necessarily mean the trend is getting ready to turn down.
The ongoing trade negotiations between the United States and China remain the “main focus” for markets and are likely to “provide the next catalyst for a strong move in sentiment,” Rakuten Securities Australia said in a morning note, following the release of the U.S. Federal minutes at 19:00 GMT.
The major Asian markets are following the lead of Wall Street which produced stellar gains on Tuesday. Both regions are being under pinned by the positive view on U.S.-Chinese relations, while the U.S. markets are getting an extra boost by the news that the government shutdown may be averted.
U.S. stock market investors are also worried about a potential second government shutdown with border policy still the major issue driving a wedge between Democrats and Republicans. Trump tweeted over the weekend, “I actually believe they (Democrats) want a shutdown.”
In the U.S. on Thursday, the major stock indexes retreated after White House economic advisor Larry Kudlow said that China and the U.S. were still far away on striking a trade deal. Later in the session, stock weakened further after CNBC reported that the Trump-Xi meeting before the March 2 deadline was “highly unlikely.”
The head of the Reserve Bank of Australia provoked the Australian currency selloff on Wednesday morning. AUDUSD loses 1.6% after Philip Low’s comments on the Central Bank readiness to consider rate cuts.
US futures point to a big gain at the open for the broad equities market. European equities staged a rebound in early Wednesday trading although gains were not universal. Equity indices in Asia were mixed on Wednesday as traders await the outcome of high-level trade talks in Washington.
In the US markets are bracing for what is to be another market-moving policy statement from the FOMC. In Brexit news, the UK Parliament is expected to vote on new terms Theresa May will then have to take to Brussels. The Hang Seng Index was the only major market to close with a gain.
US markets were marginally higher in the early pre-opening session. The French CAC was leading at midday with gains near 0.80%. The Dow Jones Industrial Average and S&P 500 were both positive in early trading but gains were small, less than 0.20%.
Today’s action is going to be dominated by earnings, there are another dozen or so reports from S&P 500 companies after the bell. The French CAC led at midday with a gain near 0.5% and was followed by a near 0.25% advance in the German DAX. Equity markets in Asia were mixed on the news.
With a light economic calendar for the day ahead, Brexit debate and the ECB monetary policy meeting minutes will be in focus.
It’s risk on through the Asian session, driving demand for commodity currencies, with focus being on U.S – China trade talks and the BoC policy decision.
The Dollar’s on the back foot early on, as the markets shift attention to trade talks, today’s stats and parliamentary debate on the Brexit deal.
It’s risk off in the FX world, with the Kiwi Dollar and Aussie Dollar the victims of Apple’s sell-off and weak data out of China, as the Yen rallies.
Economic data out of China gives the markets a rude awakening in the New Year, wiping out risk appetite at the start of the day.
A jump in Treasury yields did the trick for the Dollar on Wednesday, today’s stats will need to be solid for the USD to see more green.
Asian markets fell in Thursday trading in the wake of the Wednesday’s FOMC meeting. Early Thursday futures action had the indices holding steady near Wednesday’s closing prices but there is little hope Santa Claus is coming to town this year.