Asian stocks are in steady decline and concern about the new tariffs Trump may place on Chinese products on Friday

Asian equities retreated on increased anxieties about the Sino-US trade tensions ahead of Washington’s end of week deadline to impose tariffs on Chinese imports, while the Yuan recovered after China’s central bank acted to calm nervous investors

Asian stocks are in steady decline and concern about the new tariffs Trump may place on Chinese products on Friday

Asian stocks are in steady decline

Asian equities retreated on increased anxieties about the Sino-US trade tensions ahead of Washington’s end of week deadline to impose tariffs on Chinese imports, while the Yuan recovered after China’s central bank acted to calm nervous investors.

On Tuesday, wall street equities declined giving up early gains in a truncated session ahead of independence day holiday on Wednesday as technology shares were pressured a day after a solid start for the quarter on Monday.

The majority of market participants feared that Washington will go ahead with its plan to increase a 25% tariff on 818 product categories from China including cars on Friday, which Beijing has vowed to match with tariffs on U.S. products. They are worried that such a move could ignite a full-scale international trade war and harm the global economy specifically as the Trump administration has threatened tariffs on imports from many other major economies.

Oil prices were supported as larger-than-expected fall in U.S. stockpiles data from the American Petroleum Institute confounded worries about a supply shortage.

As for Asian equities, the Nikkei 225 was down more than 0.35% and losses were the most pronounced in the information and technology sector. Chinese shares resumed falling as well, keep in mind that another down week for the Shanghai Composite would mean its longest losing streak since 2011. Similarly, the ASX 200 and KOSPI fell about 0.45% and 0.17% respectively.

Outlook:

Looking ahead, investors would keep an eye on the UK’s Markit services PMI for June, set to release in a while.

Trader’s View:

EURUSD: No change in EUR/USD’s outlook as consolidation from 1.1505 continues.

EUR/USD

GBPUSD: GBP/USD’s consolidation from 1.3050 is still in progress and intraday bias remains neutral.

GBP/USD

USDCAD: USD/CAD’s fall from 1.3385 resumed after brief recovery and breaks 1.3130.

USD/CAD

USDCHF: USD/CHF is still bounded in range of 0.9855-9991 and intraday bias remains neutral.

USD/CHF

USDJPY: Break of 110.55 minor support argues that rebound from 108.10 might be finished at 111.15 already.

USD/JPY

USDZAR: The rand (USD/ZAR) firmed in early trade on Tuesday morning against the dollar, strengthening 0.5% to trade at R13.75/$ at 09:54. 

The dollar index, which tracks the dollar's relative strength against a basket of currencies of its major trading partners, was marginally weaker on Tuesday, down 0.1% at 94.78 at 09:34. 

USD/ZAR

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***Information contained in this newsletter are gathered from third parties and should not be regarded in any way as trade advice or recommendations by CM Trading. CM Trading does not recommend or advise traders or investors in their decision making but merely provides information from the market for its clients as additional information is made available as per the events occurring in the financial markets.

 

HIGH-RISK WARNING:

Trading Forex (Foreign Exchange) and Contracts for Differences (CFD’s) is highly speculative, carries a high level of risk and may not be suitable for all investors. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin.

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