Asian Stocks Mixed As China Considers Its US Tariff Response
- Global trade was back in the spotlight, but not in a good way
- China and the US seem set to trade tit-for-tat import tariffs
- NZD/USD broke higher, snapping a long-held downtrend
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Asian stocks were mixed on Wednesday after a choppy session which saw global trade concerns back to the fore.
The US Trade Representative’s Office published a list of around 1,300 Chinese imports which could face new tariffs. China’s response was overt opposition to these barriers and a promise to reciprocate. China’s Ambassador to the US told television reporters that his country would “fight back” against them. Still, the Nikkei 225 ended up by 0.1%, with the ASX 200 higher by a similar modest amount. The Kospi and the Hang Seng were both lower, with stocks in Shanghai in the green heading into their market close.
Turning to foreign exchange, the US Dollar pared some of the previous session’s gains against the Japanese Yen but still held up around the 106.50 handle. Perky Australian building-approval data gave AUD/USD some support, with only a little of that taken away by weaker-than-expected set of service-sector Purchasing Managers Index data from China from the Caixin media group.
The New Zealand Dollar managed to break above a downtrend line which had previously capped trade since mid-February.
NZD/USD seems to have formed a fairly solid base around this month’s lows, although the break higher will need to prove itself over the next couple of sessions. There was no clear news behind this gain and it looks technically driven, although there was a slight rise in consumer confidence according to survey evidence Wednesday.
There are plenty of heavyweight economic releases still to come Wednesday from Europe and North America. Eurozone Consumer Price Index data are up first, with the US Institute for Supply Management non-manufacturing survey, durable goods orders and the ADP employment snapshot also due.
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--- Written by David Cottle, DailyFX Research
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