Fundamental analytics

US-China trade relations remain in focus of Asian market

1. Trade negotiations between the USA and China

2. A large block of economic statistics from China

3. Speech by Fed Chairman Jerome Powell

On Monday, Asian markets traded mainly in the red zone. Investors reacted negatively to Donald Trump's comments that the United States and China have not yet reached an agreement to cancel the previously introduced trading duties. At the same time, the American president noted that the negotiations were proceeding quite successfully. Negatively, the market also received news from Hong Kong about the escalation of violence in the city. Japan's Nikkei 225 closed trading down 0.26%, China's Shanghai Composite fell 1.83%, Hong Kong's Hang Seng lost 2.62%, and South Korean KOSPI sank 0.62%.

On Tuesday, risk appetite returned to investors. Trade negotiations between the US and China remain in the spotlight. Most investors are confident that despite the differences in the near future, the parties will sign an interim foreign trade agreement. At the end of the day, the Japanese Nikkei 225 grew by 0.81%, the Chinese Shanghai Composite + 0.17%, the Hong Kong Hang Seng recovered by 0.52%, and the South Korean KOSPI rose by 0.71%.

In the second half of the week, trading will be influenced not only by geopolitical news, but also by important economic statistics from China and the USA. On Wednesday, data on orders for durable goods will be released in the United States and Fed Chairman Jerome Powell will speak. On Thursday, China will present a large block of statistics: a report on industrial production, data on investments in fixed assets and statistics on the labor market. Retail sales data for October will be published in the United States.

The pair USD / THB opens the trading week with a decline amid a slight weakening of the US currency. This week, Thailand is not expected to publish important economic data, so the main impact on trading will have the US dollar.

USD / SGD is trading in a narrow range, despite the publication of very good retail sales data in Singapore on Tuesday. According to the report, in September, compared with August, sales increased by 1.9%, while the forecast was -1.4%. At the same time, the annual decrease in sales amounted to 2.2%, while the forecast was -6.1%. Singapore will release GDP data on Friday.

The pair USD / INR maintains the upward movement vector. Investors reacted negatively to weak data on industrial production in India. According to the report in September, production decreased by 4.3%, compared with the same period last year. Experts expected a decline of 2.0%. The volume of production in the manufacturing industry decreased by 3.9%, against -1.6% a month earlier. On Wednesday, India is expected to publish data on the dynamics of wholesale prices.


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