Most Asian Markets Fall On New US Tariff Threat, Trade Dominates
ASIAN STOCKS TALKING POINTS:
- Most Asian Stocks Dropped
- Worries of trade-spat escalation between China and the US did the damage
- The Japanese Yen got its customary haven bid
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Trade worries clobbered most Asian stocks once again through Tuesday’s session.
Donald Trump said on Monday that he had asked the US Trade Representative to identify $200 billion worth of Chinese products, which could be subject to an additional tariff of 10% if China fails to ‘change its practices.’
China has naturally enough promised retaliation should these barriers be raised, as it has to other similar threats.
This news was enough to see Chinese markets tumble quite sharply. The Shanghai Composite was down by nearly 3% in the middle of its afternoon, with the Hang Seng off by 2%. The Nikkei was lower too with only Australia’s ASX 200 once again bucking the gloomy trend.
The Japanese Yen got its customary haven boost as trade worries reduced risk appetite, with more growth-linked currencies like the Australian Dollar feeling the pressure. AUD/USD is now down to lows not seen for more than a year on its daily technical chart, largely thanks to highly divergent interest-rate differential in the US Dollar’s favour.
Its latest fall has put a cluster of support from May, 2017 back into sharp focus.
Coming up later Tuesday are official US housing start and building permit data. Central bank watchers can look forward to hearing from European Central Bank President Mario Draghi who will speak in Portugal.
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--- Written by David Cottle, DailyFX Research
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.