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.

Easing trade tensions help Asian equities recover

07:01 12 December 2018

Summary:

  • Asian equity markets rally following Trump’s upbeat comments regarding trade negotiations with China

  • Huawei CFO becomes a bargaining chip in trade talks

  • US dollar slightly retreats, yen moves lower as risk sentiment improves

Encouraging remarks

Start investing today or test a free demo

Open account Try demo Download mobile app Download mobile app

After a lacklustre session on Wall Street we have seen successful trading across Asian equity markets in response to Donald Trump’s remarks concerning the ongoing trade negotiations with Beijing. In an interview with Reuters US President said that China is buying tremendous amounts of soybean and these purchases are just starting now (if true, one may hope for even higher amounts being purchased by China). In terms of negotiations with China he said that they are already taking place via telephone but if needed he is ready to meet with Chinese President Xi Jinping (these are similar comments we were offered yesterday, on his Twitter account he wrote to prepare for ‘some important announcements’ with regard to trade talks). Trump also added that his administration will probably have another meeting with top Chinese officials. As far as Chinese tariffs on US cars are concerned, Trump suggested that China is looking to cut these duties to 15% ‘immediately, very quickly’ assuring that the US will not raise tariffs on Chinese goods until he finds out whether the US and China will reach a deal. US President concluded his interview with Reuters saying that auto tariffs on Japan and the European Union will depend on trade negotiations with them.

The second day of encouraging comments from the White House has helped Asian stocks recover. As a result, the Japanese NIKKEI (JAP225) closed 2.15% higher (the weaker yen helped) while the Hang Seng (CHNComp) is climbing 1.6%, the Shanghai Composite is rising 0.25% and the Australian S&P/ASX 200 (AUS200) increasing 1.4%. Let us also add that Trump, in his earlier comments, said that a release of Huawei CFO could be a part of a trade deal with China and it could be done if it would serve national security. Additionally, he added that he has spoke with the US Justice Department about the arrest of Meng Wanzhou. It sounds like a blackmail as Trump says clearly that he will intervene in this case if ‘the largest trade deal is made’. As some had expected earlier, Huawei CFO has become a bargaining chip in trade negotiations which could be a danger game between the two world’s largest economies.

Technically the Hang Seng could be set for a rebound in the nearest future as the price managed to stay above 10200 points. As a consequence, a bounce at least toward 11000 points could be on the cards. Nevertheless, from a broader standpoint nothing has changed of late. The index is still moving within a range and this pattern is likely to last until a binding trade agreement between the US and China is reached. Source: xStation5

Dollar moving nowhere

The US dollar has lost some of its gains over the Asian session but these losses have been modest to say the least. The Japanese yen has been the sole major currency being able to resist the greenback’s weakness and it is trading 0.1% lower at the time of writing reflecting easing trade tensions. In his interview with Reuters Trump also said that it would be foolish for the Federal Reserve to raise interest rates next week adding that lower rates are needed to support the US economy amid the trade war with China. This was another time when Trump implicitly criticized the Fed’s policy. The US central bank is widely expected to deliver a rate increase during its last meeting this year but the rate path for the next year is much blurrier. Over Asian hours trading the US 10Y yield climbed 1 basis point to 2.89% remaining well below 3%, the level seen at the beginning of December.

The EURUSD is trading close to its support area being localized slightly above 1.13. The upcoming hours will be critical for the pair and the ECB meeting could set a direction for the future. Source: xStation5

In the other news:

  • Japanese PPI rose 2.3% YoY in November missing the consensus of a 2.4% YoY rise

  • Japanese core machine orders climbed 4.5% YoY and fell short of the expected 5% YoY increase

  • Italy’s Salvini may reportedly seek elections in Marchi next year, according to La Repubblica

This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

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