Análisis de mercado diario

Risk appetite has been given a boost on several fronts: the US and China have officially agreed to resume trade talks in October, while UK Prime Minister Boris Johnson’s willingness towards a no-deal Brexit has been significantly curtailed, after Parliament moved to block a no-deal Brexit occurring on October 31 and also rejected the call for a snap election.

Such developments have given Asian assets cause to lift their heads higher: Asian stocks are a sea of green, while most Asian currencies are strengthening against the US Dollar, with the South Korean Won the runaway leader of the pack gaining about 0.8 percent versus the Greenback.

Safe haven assets are also paring recent gains, with Gold shedding some 0.9 percent, the Japanese Yen weaker by about 0.3 percent against the US Dollar, and 10-year US Treasury Yields spiking above the psychologically-important 1.50 percent level.

Seasoned global investors still cautious over downside risks

Despite the gains in riskier assets, global investors are not getting carried away by this surge in optimism, having been seasoned by the tumultuous developments surrounding the year-long US-China trade conflict as well as the Brexit saga which has dragged on since 2016. The lift in risk sentiment appears mitigated by the concern that the latest positive developments surrounding these macro events (US-China trade conflict, Brexit) may prove fleeting and do not yet fully nullify these downside risks. In order for risk sentiment to push higher, markets will need to be shown further material signs that US and China are indeed drawing closer to a meaningful and lasting trade deal, while the prospects of a no-deal Brexit have to be significantly lowered some more, if not completely snuffed out.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

Asia stocks are on course for a positive end to what has been a volatile month, after major US stock indices gained over 1.2 percent each overnight on signs that US-China trade tensions will not further escalate in the near-term.

Nevertheless, the US-China trade conflict is still expected to have a major say over market sentiment in September. Despite US tariffs on $300 billion worth of Chinese goods set to be raised beginning September 1, another round of trade talks could take place in the month ahead. Such a possibility allows markets to continue clinging on to hope that a resolution to this protracted impasse is not dead in the water, with traders using this as an excuse to push further into risk-on territory at any given opportunity.

Dollar index on quest to erase all of August losses

The Dollar index (DXY) breached the 98.5 level before moderating, with Asian currencies showing mixed results at the time of writing. The second reading of the Q2 US GDP of two percent was in line with market expectations, which allowed DXY to edge higher, in an attempt to erase all of its losses this month.

Although investors are well aware of the slowdown in the US economy, the latest data underscored the strength of consumer spending (which makes up over 60 percent of US GDP), and shows that the primary growth driver in the world’s largest economy is still resilient.

Still, the headline figure suggests that the protracted US-China trade tensions are weighing on other components of the US economy, such as exports and investments. Faced with slowing growth prospects in the second half of 2019, the Federal Reserve’s decision to lower US interest rates appears justified, with markets pricing in two more Fed rate cuts in 2019.

Moving forward, shifting market expectations surrounding the Fed’s policy path are set to sway DXY, as the Fed’s data dependence continues to be tested in the interim. Given the resilience of the US Dollar, along with growing concerns over the state of the global economy, the risks for most Asian currencies are currently tilted to the downside.

Sterling in September: Brexit-driven volatility

September will also see the suspension of the UK parliament, while Brexit talks press ahead with UK and EU officials set to meet twice weekly. Even with the prospects of more engagement between the UK and EU over Brexit, the Pound has returned into sub-1.22 territory against the US Dollar.

Pound traders are well aware of the politically-treacherous path that lies ahead in the quest to find a Brexit deal ahead of the October 31 deadline. Still, Sterling’s outlook remains dismal at this point in time which is keeping GBPUSD on a slippery slope, with a likelier path towards 1.20.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

Traders are taking advantage of a lull in news flow stemming from US-China trade tensions to send Asian stocks higher, after the S&P 500 posted a third consecutive day of gains following strong US corporate earnings and economic data. Risk appetite appears to be making a mild comeback, with Gold dropping towards the $1,286 mark after breaching $1,300 earlier this week, while USDJPY is inching back towards the psychological 110 level.

Having learned their lessons from recent weeks, market participants will have to think long and hard before charging head-on into riskier territory over the near-term. The global economic outlook remains delicate, compounded by the uncertainties surrounding US-China trade ties as well as pockets of geopolitical tensions around the world, risk sentiment doesn’t yet have a strong leg to stand on, which warrants adopting a cautionary tone for the time being.

Meanwhile, the US Dollar Index climbed 0.4 percent and is currently trading around the 97.8 handle for the first time in two weeks, after positive US data offset earlier disappointing economic indicators. The stronger Greenback translated into declines for most Asian currencies, except for the South Korea Won, Philippine Peso, and the Offshore Chinese Yuan, at the time of writing.

GBPUSD hits 3-month low as PM uncertainty weighs on Pound

GBPUSD is testing the 1.28 support level for the first time since February, as the Pound endures its longest run of losses against the Euro since 2000. An added layer of uncertainty now hangs over the Brexit outlook, as UK Prime Minister Theresa May has agreed to begin the countdown to her tenure starting next month. May will first have to focus on a last-ditch attempt to get her Brexit deal approved in Parliament during the week of June 3, before working on a timetable to find her successor.

The Pound is reacting negatively to such political uncertainty, as markets try and ascertain what a new UK Prime Minister might mean for the Brexit path ahead. The downside for the Pound may be exacerbated should the vacancy for the top job be filled by a hardline Brexiteer, which then risks the return of a no-deal Brexit.

Aussie Dollar weakening ahead of federal elections

The Aussie Dollar has the dubious honour of being the worst performing G10 currency so far in May, as Australia gears up for its May 18 federal elections. Domestic political risk adds to the downward pressure on AUD, as Australia contends with soft economic data, both domestic and also external, which are raising expectations of an interest rate cut by the Reserve Bank of Australia. Given the bearish outlook for AUDUSD, the currency pair looks likely to open a path towards the 0.68 level.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

US-China trade tensions are expected to continue being the dominant theme this week, as Asian markets kicked off Monday in risk-off fashion. Except for the Japanese Yen, most Asian currencies are now weaker against the US Dollar. The Shanghai Composite Index opened 1.5 percent lower before paring losses at the time of writing, as most Asian equities also declined on Monday morning. Meanwhile, S&P500 futures are now down one percent, potentially adding more pain to US stocks which last week saw its biggest weekly decline so far in 2019.

Over the weekend, US President Donald Trump offered mixed signals regarding his approach to trade negotiations with China. On one hand, he tweeted that talks will continue in a “congenial” manner, with “absolutely no need to rush”. On the other hand, he also said he loves “collecting big tariffs” and told China to “act now”. The tweets came amid reports that US trade negotiators gave their Chinese counterparts a one-month deadline to reach an accord or risk having US tariffs imposed on all Chinese imports.

Markets’ base case on shifting sands?

Given Trump’s unpredictability, attempts to predict the end result of US-China trade talks risk placing any base case on shifting sands. At the time of writing, markets are still waiting for details on China’s “countermeasures” to the higher US tariffs imposed on the $200 billion worth of Chinese goods on May 10. Keep in mind that President Trump has also cited the possibility of a 25 percent on a further $325 billion of Chinese goods that are currently tariff-less. While it appears that some market participants are still holding out for some form of a formalized US-China trade deal, last week’s selloff from risk assets could set markets up for more trade-related volatility ahead.

Potential deviations for US, China economic trajectories may add to market uncertainty

Besides commentary from either government on the trade front, investors will also keep a close eye on major economic indicators out of both the US and China this week. The respective sets of industrial production and retail sales data out of both countries are due Wednesday, set against the backdrop of re-emerging tensions between the world’s two largest economies. The US economic growth momentum is expected to remain steady, while China has been showing signs of stabilizing in recent months; any significant deviation from those trajectories may add another layer of uncertainty to markets.

Safe havens strengthen as Trump tells China to “act now”

While Trump has asked China to “act now”, investors didn’t have to wait for such a call from the US President before taking risk off the table. Gold is now holding around the mid $1,280 while the Japanese Yen is strengthening, with USDJPY falling further below the 110 level. Meanwhile, the Dollar index (DXY) is steadying around the 97.3 level at the time of writing, having wrapped up two straight weeks of declines.

A lack of progress in the US-China trade impasse should create a supportive environment for safe haven assets, while a major deterioration in tensions could see a major upwards move for the likes of Bullion and JPY.

Asian economies to brace for further global trade slowdown

For the week ahead in Asia, Singapore and Indonesia are set to release their respective external trade figures for April, amid ramped-up trade tensions between the US and China. The higher barriers to trade, coupled with the slowdown in the global economy, have weighed on Asian economies as exports have posted declines since 2018. As markets brace for China’s “countermeasures” to the US tariff hike, along with potentially more US tariffs in the pipeline, trade-dependent Asian countries may have to brace for a further slowdown in exports, while becoming more reliant on domestic consumption to prop up growth momentum.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

Investors have kicked off 2019 in a positive mindset. The S&P 500 rallied during 5 out of the past 6 trading days booking 3.1% gains so far, and the index is up more than 10% from its December lows. The MSCI World Index saw a similar performance rallying 3.6%, and credit spreads have narrowed significantly especially on high-yield bonds supporting the risk-on environment. Oil prices entered a bull market yesterday after gaining around 5% on hopes that Beijing and Washington are moving in the right direction to end their trade dispute. Meanwhile, the Chinese Yuan leapt to a 5-month high.

The impressive comeback in risk appetite indicates that investors were a little too pessimistic in December and that growth outlook isn’t as gloomy as some might think. However, it’s still early to judge.

The three-day talks between U.S. and Chinese officials played a significant role in calming the markets. There were clear signs of progress in terms of moving towards higher levels of negotiations that could lead to some sort of agreement before March 2, ahead of the the 90-day truce window. Despite this positive environment, nothing should be taken for granted. Trump’s demands are difficult to meet and talks may break down at any moment.

Probably, that’s why the rally in equity markets seems to have taken a pause on Thursday with Asian markets struggling to find direction and U.S. equity futures pointing towards a lower open.

The FOMC minutes released on Wednesday showed that some policymakers were reluctant to hike rates in December, given the volatility in financial markets and week inflationary pressures. The minutes revealed that the consensus was more dovish than Fed Chair Powell’s assessment during the press conference. Fed members saw the risks of the outlook to be “roughly balanced”, but some noted that “downside risks may have increased of late”.

The Dollar fell further after the minutes were released on expectations that interest rates may be raised only once or not at all in 2019. This should continue to add pressure on the Greenback, unless economic data begins to surprise to the upside.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.