 Global markets are back is heavy risk-off mode today as US-China tensions keep on escalating. Words from both sides suggest that neither one is going to back down from the current stance and there is no chance of returning to the table any time soon. More importantly, it's seems that neither US or China is worried about the escalations. On the Chines side, Commerce Ministry spokesman Gao Feng warned: "If the United States wants to continue trade talks, they should show sincerity and correct their wrong actions. Negotiations can only continue on the basis of equality and mutual respect... We will closely monitor relevant developments and prepare necessary responses." Foreign Ministry spokesman Lu Kang said "relevant U.S. actions obviously do not create a good atmosphere or environment for consultations. On the US side, Secretary of State Mike Pompeo said he's been "explaining the risks" regarding Huawei about national security as he travels around the world. And he criticized that "for them (Huawei) to say that they don't work with the Chinese government is false." He added, "If you're a state-directed business and you take on subsidies direct from the Chinese government, there's no doubt you can make real hay." Additionally, sentiments are weighed down by poor economic data from Eurozone. Most importantly, both German Ifo Business Climate and PMIs suggested that slowdown in German manufacturing factor is quickly spreading over to services. Meanwhile, risks of no-deal Brexit is increasing. There are rumors flying around regarding the exit date of UK Prime Minister Theresa May. While she may stay till Trump's visit in early June, her position won't last long. In the currency markets, Yen and Swiss Franc remain the strongest one on risk aversion, followed by Dollar. Canadian Dollar is the weakest one for today, followed oil prices lower. Euro is the second weakest on it's down economy challenges. Technically, with today's decline, EUR/JPY is eyeing 122.08 temporary low. EUR/USD is accelerating and could take out 1.1111 bottom to resume larger down trend soon. Given the weak sentiments, AUD/USD will likely follow through 0.6864 temporary low too. In Europe, currently, FTSE is down -1.34%. DAX is down -1.58%. CAC is down -1.63%. German 10-year yield is down -0.019 at -0.103, back below -0.1 handle. Earlier in Asia, Nikkei dropped -0.62%. Hong Kong HSI dropped -1.58%. China Shanghai SSE dropped -1.36%. Singapore Strait Times dropped -0.70%. Japan 10-year JGB yield dropped -0.0104 at -0.061. | 
No comments:
Post a Comment