Optimism in U.S.-China Trade Talks Pushes Asian Shares Up

Trade

Positive indications by Steven Mnuchin, the US Treasury Secretary said that the trade talks were heading for a final round boosted the Asian shares. Moreover, the Chinese reported positive export data which also contributed to the Asian shares reaching a 9-month high.

In the market:

The Chinese blue-chip index CSI 300 increased by 2.2 %, the Hang Seng rose by 1.2%, South Korea’s KOSPI climbed by 0.7% while the MSCIs Asia Pacific broadest index increased by 0.6%. The Nikkei gained by 1.4% reaching a 4-month high. Even Wall Street rallied as the Chinese export data was released. To add to this, US Treasury Secretary on Saturday said that both the countries were ‘close to the final round of negotiations’. Dow saw a rise of 1%, Nasdaq climbed 0.5% and S&P 500 increased by 0.7% on Friday.

Currency market

Against the major currencies, the dollar index was at 96.863 a slight fall of 0.1%.

The Australian dollar climbed to a seven-week high and was at 0.7173 due to Chinese economy showing slight growth.

The Euro due to the multi-billion deal closure by Mitsubishi UFJ was up and was at $1.1309

Commodities.

The Brent oil breached the $70 benchmark for the first time since 2016 due to supply cuts by OPEC and its allies and sanctions by the US on Iran and Venezuela and was at $71.41. The WTI crude futures were at $63.60.

The analysts are happy with the new developments a leading analyst from JP Morgan said ‘Stocks bulls certainly have the wind at their backs with improving growth bit steady inflation, reduced tensions and a solid/better than feared Q1 earnings season’. The investors also were happy with the U.S.-China talks heading in a positive direction. Economist Ethan Harris said ‘We expect a relative market-friendly U.S.-China deal, in our view, market and political concerns will constrain further fights. Think skirmishes rather than major battles’.

Investors were pessimistic about the global economic growth due to the weather Chinese growth, Brexit and the trade tensions between China and the US. To add to it, the IMF also reduced its growth forecast for the third time which added to the fears. Now with a positive export data and talks going well between China and the US, the investors are awaiting the GDP data of China and the corporate earnings report to see the impact of it on the economy needs to be seen.

Mary Conn

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