 Market sentiments seem to be hurt by news that China is set to seek WTO backing next week to slap sanctions on the US. The sanctions would be for non-compliance with a WTO ruling over US dumping duties, which China won in 2016. The case was then confirmed in 2017 after the US appealed. Some took that as a signal that China is not going to back down. But indeed, neither side expressed any message that they're going to soften their stance. Trump is ready to impose 25% tariffs on USD 200B in Chinese import any time, as public hearing ended last week already. China is also well prepared for retaliation on USD 60B of US goods, with tariffs from 5% to 25%. Trump is also ready to start the process for tariffs on another USD 267B in Chinese products. Then no more products to tariff, China would seek other measures to counter. The plot is already written, at least until US mid-term elections. With trade war back in the headlines, Dollar is trading as the strongest one for today, followed by Swiss Franc. Canadian Dollar is the third strongest. Foreign Minister Chrystia Freeland is back in Washington to restart trade talk with the US. But there is little expectation for breakthrough. Sterling was lifted by stronger than expected wage growth earlier today but it's now trading in red against all others as rally lost steam. Australian Dollar and New Zealand Dollar are the next weakest. In other markets, major European indices are all in red today. FTSE is currently down -0.56%, DAX down -0.65%, CAC down -0.39%. German-Italian yield spread continues to widen, signaling calmness regarding Italy's deficit. In Asia, Nikkei gained 1.3% to 22664.69. But Hong Kong HSI lost -0.72% while Singapore Strait Times dropped -0.35%. In particular, China Shanghai SSE dropped -0.18% to 2664.8, below August's lowest close at 2668.96. Key support level at 2638.30 (2016 low) looks rather vulnerable. And it seems, investors are preparing themselves well for escalation in US-China trade war. |
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