Market participants look for China-US talks to take place this week

Posted 07 May, 2019

The markets still entertain a hope that the Washington-Beijing talks will eventually take place especially given the recent reports that the parties are about to hold a meeting in Washington this week.

The participants keep estimating a chance that US Administration raises import duties on Chinese products this Friday following the statement made by the US President Donald Trump on his Twitter. However, South Korean won and Chinese yuan have remained on the downward track against the greenback. Speaking about safe heavens, in particular, Japanese yen and gold, maintain Monday levels so far.

This week, the markets will focus on trading tensions between two major economies, while any aspects of the negotiations to be held in Washington may entail certain response from traders and investors. The volatility in a quite sensitive market can be extra high. If Washington decides to raise the duties (10% now) to 25% this Friday, this move will entail sales of risk assets as investors are concerned about the impact of this increase on already slower global economic growth.

Speaking about the market indices, the S&P 500 collapsed by 0.45% yesterday. Stock markets in China and Singapore posted uptrend at the beginning of today's trading.
In this situation, central banks will be in the market spotlight in the near term.

With renewed fears of trade relations between the leading economies in the world, investors will also pay attention to the central banks that used to indicate external downward risks and adopted a soft monetary policy.

Notably, central banks in Australia, Thailand, Malaysia, Philippines and New Zealand are expected to announce their further monetary policy this week. At the same time, some of the above-mentioned banks can take preventive rate reductions seeing the negative impact on the global economy from Washington-Beijing tensions. As a result, national currencies can face even stronger pressure.

Previous forecast

11 May, 2019 12:54

← Unexpected response to US duties from stock markets

It has been officially confirmed that the US Donald Trump eventually revised the import duties on Chinese products worth $200 billion. As a result, the imports from China worth $250 million in total are subject to 25% tariffs now. Meanwhile, the Asian stock markets reacted somewhat unexpectedly to these reports after a week sales.

Unexpected response to US duties from stock markets

Next forecast

03 May, 2019 15:53

BOE makes unexpected forecasts, pound down anyway →

The market generally expected such interest rate scenario under which the Bank of England decided to keep the rates unchanged at 0.75%. At the same time, the real surprise was BOE's economic outlook that gave an opportunity for further monetary tightening.

BOE makes unexpected forecasts, pound down anyway
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