CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Calm Asian response to monetary tightening in the US

06:02 14 June 2018

Summary:

  • Asian equity markets trade slightly lower on Thursday following a rate hike delivered by the Fed
  • Australian jobs report mixed, investors look a bit perplexed as Aussie drives subtly lower
  • Chinese May’s set of data disappoints across the board
  • US President Donald Trump is expected to discuss tariffs on Chinese goods Thursday

US indices ended Wednesday’s trading a bit lower following a rate increase delivered by the Federal Reserve. The press conference brought several hawkish points, but the overall outlook for the US dollar seems to be tricky as the yield curve is likely to continue flattening. And, it’s already happened as the 2s10s spread has slipped below 40 bps in the morning reaching its lowest point since the GFC a decade or so ago. Meanwhile, Asian investors have been quite calm, and losses have not been substantial as of yet. The Japanese NIKKEI (JAP225) along with the Hang Seng (CHNComp) are losing 0.6% each being the worst performers there. When the Fed is already done now attention turns to two other topics - trade tensions as well as the ECB meeting.

Start investing today or test a free demo

Open account Try demo Download mobile app Download mobile app

link do file download linkThe underlying employment trends kept bullish momentum in May. Source: Macrobond, XTB Research

In turn, in terms of macroeconomic readings we were offered overnight one needs to mention the Australian jobs report for May which proved to be equivocal on balance a bit disappointing. The overall employment change totalled 12k falling short of the median estimate of 19k, and what’s even more depressing full-time employment declined as much as 20.6k while a rise was driven solely by part-time employees whom a count increased 32.6k. On top of that, the unemployment rate slipped to 5.4% from 5.6% beating expectations suggesting a tiny slide to 5.5%, and this could be the most upbeat point of the report as the labour force participation rate decreased just by 0.1pp to 65.5% implying that lower unemployment was not driven just by decreased activity. The Aussie might have been weighed down by a slew of Chinese data as all of them came in below expectations. The data for May looks as follows:

  • retail sales +8.5% yoy (9.6% expected)
  • industrial output +6.8% yoy (7% expected)
  • fixed assets investments excluding rural +6.1% (7% expected)

These prints add to concerns that the economy is finally starting to slow down as a prolonged crackdown on riskier lending, pushing up borrowing costs, is taking its toll. The Aussie is trading 0.3% lower as of 6:56 am BST.

link do file download linkThe EURAUD could be one of the most interesting pair to watch for today owing to the upcoming ECB meeting. Notice that the pair is closing a lower bound of the channel, hence more sellers might occur before long. However, once they break through this line, it could open the way for further rises. Source: xStation5

Finally, a senior White House official informed on late Wednesday that US President Donald Trump would meets his top trade aides on Thursday to discuss whether to activate tariffs on Chinese imported goods worth up to $50 billion. If he stops short of doing so, it could dial back trade-related concerns possibly helping stock markets recover.

Disclaimer

This article is provided for general information purposes only. Any opinions, analyses, prices or other content is provided for educational purposes and does not constitute investment advice or a recommendation. Any research has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Any information provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it.

Start investing today or test a free demo

Open account Try demo Download mobile app Download mobile app

Past performance is not necessarily indicative of future results, and any person acting on this information does so entirely at their own risk, we do not accept liability for any loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.

Back
Xtb logo

Join over 935 000 investors from around the world

We use cookies

By clicking “Accept All”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.

This group contains cookies that are necessary for our websites to work. They take part in functionalities like language preferences, traffic distribution or keeping user session. They cannot be disabled.

Cookie name
Description
SERVERID
userBranchSymbol cc 2 March 2024
adobe_unique_id cc 1 March 2025
test_cookie cc 1 March 2024
SESSID cc 9 September 2022
__hssc cc 1 March 2024
__cf_bm cc 1 March 2024
intercom-id-iojaybix cc 26 November 2024
intercom-session-iojaybix cc 8 March 2024

We use tools that let us analyze the usage of our page. Such data lets us improve the user experience of our web service.

Cookie name
Description
_gid cc 9 September 2022
_gat_UA-22576382-1 cc 8 September 2022
_gat_UA-121192761-1 cc 8 September 2022
_ga_CBPL72L2EC cc 1 March 2026
_ga cc 1 March 2026
AnalyticsSyncHistory cc 8 October 2022
af_id cc 31 March 2025
afUserId cc 1 March 2026
af_id cc 1 March 2026
AF_SYNC cc 8 March 2024
__hstc cc 28 August 2024
__hssrc

This group of cookies is used to show you ads of topics that you are interested in. It also lets us monitor our marketing activities, it helps to measure the performance of our ads.

Cookie name
Description
MUID cc 26 March 2025
_omappvp cc 11 February 2035
_omappvs cc 1 March 2024
_uetsid cc 2 March 2024
_uetvid cc 26 March 2025
_fbp cc 30 May 2024
fr cc 7 December 2022
muc_ads cc 7 September 2024
lang
_ttp cc 26 March 2025
_tt_enable_cookie cc 26 March 2025
_ttp cc 26 March 2025
hubspotutk cc 28 August 2024

Cookies from this group store your preferences you gave while using the site, so that they will already be here when you visit the page after some time.

Cookie name
Description
personalization_id cc 7 September 2024
UserMatchHistory cc 8 October 2022
bcookie cc 8 September 2023
lidc cc 9 September 2022
lang
bscookie cc 8 September 2023
li_gc cc 7 March 2023

This page uses cookies. Cookies are files stored in your browser and are used by most websites to help personalise your web experience. For more information see our Privacy Policy You can manage cookies by clicking "Settings". If you agree to our use of cookies, click "Accept all".

Change region and language
Country of residence
Language