Stocks move higher as US may consider lifting duties on China

7:01 AM 18 January 2019

Summary:

  • US Treasury Secretary Steven Mnuchin proposed lifting duties on China to push forward trade talks

  • Japan’s inflation slowed last month highlighting the difficulty in striking the 2% inflation objective

  • Currencies trade flat, Chinese stock markets edge higher

Progress in the hands of the US

Start investing today or test a free demo

Open real account TRY DEMO Download mobile app Download mobile app

US indices jumped in late trading on Thursday following revelations that the United States could consider lifting all or some of duties it imposed on the Chinese economy last year. This proposal was put forward by US Treasury Secretary Steven Mnuchin who added that the goal was to push forward trade talks and get China’s support for longer-term reform. On the other hand, US Trade Representative Robert Lighthizer has resisted this idea suggesting that it would be considered as a sign of weakness, as the WSJ reports. Moreover, some officials from the White House are reportedly claiming that no such a discussion of lifting tariffs is taking place right now adding that US President Donald Trump has no interest in making decisions now. Finally, a Treasury spokesman said that talks were “nowhere near completion” implying that a lot of things need to be agreed on before striking any binding solution on the matter. Anyway these remarks were seen by market participants as a positive signal and they rushed to buy stocks in late trading on Thursday. As a result, the Dow Jones (US30) jumped and was gaining 1% before correcting this increase and ending the day with a still decent 0.7% rise. The similar rises were seen in the SP500 (US500) and the NASDAQ (US100). Let us remind that we got information earlier this week that Chinese vice premier Liu He is scheduled to travel to Washington at the end of this month for trade negotiations and this the point the Trump’s administration is focusing on right now. The US 10Y yield spiked on the news from above 2.72% to almost 2.76% but then erased this rally to some extent. It keeps trading slightly above 2.74% this morning.

Friday could be a crucial day for the NASDAQ investors. Note that the price broke through its 50DMA earlier this week and it tested this level successfully yesterday. Therefore, it seems to be reasonable to expect the price rising toward 6865 points where the first more notable resistance can be found. Nevertheless, we reckon that this pick-up might be only temporary having nothing to do with a broad-based bull market Source: xStation5

G10 flat while Japan’s price growth slows

Movements across the G10 currencies have been pretty benign in recent hours with the Norwegian krone making the largest increase and gaining 0.15% against the US dollar. Looking at the macroeconomic calendar during the Asian session one needs to be focus basically only on the one print - Japanese inflation for December. Headline price growth slowed to 0.3% from 0.8% in annual terms and matched expectations. Core inflation gauges turned out mixed, while inflation excluding fresh food decreased to 0.7% from 0.9% in the prior year, price growth taking out fresh food and energy held unchanged at 0.3%. Either way, this is a remarkably slow pace of price growth underlining that the BoJ remains a long way off from even considering rising interest rates in the foreseeable future. Here it is worth noting that the interest rate market is pricing in 15% odds to see a rate cut be the year-end. Nonetheless, having in mind that the yen tends to move on external factors rather than domestic economic releases we stick to our view that the Japanese currency could perform well over the entire year, and this is especially true when we see the US dollar losing bullish momentum. On the flip side, a planned sales tax increase (October) seems to be the largest domestic risk for the Japan’s economy in the months to come.

The USDJPY is struggling nearby its crucial long-term support line. This level needs to be broken if bears want to push much lower (even toward 100/101). In the near-term the pair may continue trading in a range between 111 and 108. Source: xStation5

In the other news:

  • Japanese industrial production fell 1% MoM in November after falling 1.1% MoM in October, the final data showed

  • Fitch says that property market conditions in Australia and New Zealand are likely to continue to soften

  • Donald Trump has officially cancelled his travel to Davos at the World Economic Forum

  • Chinese stocks gain 1.3% a while before the close, the SP500 futures point to a slightly positive opening

Share:
Back
Xtb logo

Join over 1 000 000 XTB Group Clients from around the world

The financial instruments we offer, especially CFDs, can be highly risky. Fractional Shares (FS) is an acquired from XTB fiduciary right to fractional parts of stocks and ETFs. FS are not a separate financial instrument. The limited corporate rights are associated with FS.
This page was not created for investors residing in Brazil. This brokerage is not authorized by the Comissão de Valores Mobiliários (CVM) or the Brazilian Central Bank (BCB). The content of this page should not be characterized as an investment offer in Brazil or for investors residing in that country.
Losses can exceed deposits

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 25 October 2024
test_cookie cc 24 October 2024
adobe_unique_id cc 24 October 2025
__hssc cc 24 October 2024
SESSID cc 2 March 2024
__cf_bm cc 24 October 2024
intercom-id-iojaybix cc 21 July 2025
intercom-session-iojaybix cc 31 October 2024
xtbCookiesSettings cc 24 October 2025
TS5b68a4e1027
countryIsoCode
xtbLanguageSettings cc 24 October 2025
userPreviousBranchSymbol cc 24 October 2025
TS5b68a4e1027
intercom-device-id-iojaybix cc 21 July 2025
__cf_bm cc 24 October 2024
__cfruid
__cfruid
__cf_bm cc 24 October 2024
__cf_bm cc 24 October 2024
_cfuvid
adobe_unique_id cc 24 October 2025
_cfuvid
TS5b68a4e1027
xtbCookiesSettings cc 24 October 2025
SERVERID
TS5b68a4e1027
__hssc cc 24 October 2024
test_cookie cc 1 March 2024
__cf_bm cc 24 October 2024
_cfuvid
_cfuvid
__cf_bm cc 24 October 2024
__cf_bm cc 24 October 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-98728395-1 cc 8 September 2022
_gat_UA-121192761-1 cc 8 September 2022
_gcl_au cc 22 January 2025
_ga_CBPL72L2EC cc 24 October 2026
_ga cc 24 October 2026
__hstc cc 22 April 2025
__hssrc
_vwo_uuid_v2 cc 25 October 2025
_ga_TC79BEJ20L cc 24 October 2026
_vwo_uuid cc 16 October 2025
_vwo_ds cc 15 November 2024
_vwo_sn cc 16 October 2024
_vis_opt_s cc 24 January 2025
_vis_opt_test_cookie
af_id cc 23 February 2025
afUserId cc 25 January 2026
af_id cc 24 January 2026
AF_SYNC cc 1 February 2024
_ga cc 24 October 2026
_gid cc 25 October 2024
_ga_CBPL72L2EC cc 24 October 2026
__hstc cc 22 April 2025
__hssrc
_ga_TC79BEJ20L cc 24 October 2026
_gcl_au cc 22 January 2025
AnalyticsSyncHistory cc 31 March 2024

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 18 November 2025
_omappvp cc 6 October 2035
_omappvs cc 24 October 2024
_uetsid cc 25 October 2024
_uetvid cc 18 November 2025
_fbp cc 22 January 2025
fr cc 7 December 2022
_ttp cc 22 January 2025
_tt_enable_cookie cc 22 January 2025
_ttp cc 22 January 2025
hubspotutk cc 22 April 2025
IDE cc 10 November 2025
YSC
VISITOR_INFO1_LIVE cc 22 April 2025
hubspotutk cc 22 April 2025
_omappvp cc 11 February 2035
_omappvs cc 1 March 2024
_uetsid cc 25 October 2024
_uetvid cc 18 November 2025
_ttp cc 22 January 2025
MUID cc 18 November 2025
_fbp cc 22 January 2025
_tt_enable_cookie cc 22 January 2025
_ttp cc 22 January 2025
li_sugr cc 30 May 2024
guest_id_marketing cc 24 October 2026
guest_id_ads cc 24 October 2026
guest_id cc 24 October 2026
muc_ads cc 24 October 2026
VISITOR_PRIVACY_METADATA cc 22 April 2025
MSPTC cc 18 November 2025
IDE cc 18 November 2025
MSPTC cc 18 November 2025

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
bcookie cc 24 October 2025
lidc cc 25 October 2024
UserMatchHistory cc 31 March 2024
bscookie cc 1 March 2025
li_gc cc 22 April 2025
bcookie cc 24 October 2025
li_gc cc 22 April 2025
lidc cc 25 October 2024
personalization_id cc 24 October 2026

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