Asian Stocks Mostly Lower As Threatened US/China Tariffs Loom
ASIAN STOCKS TALKING POINTS:
- Asian stocks were broadly lower on Monday
- The approach of trade barriers between the US and China saw investors cautious
- The US Dollar gained, as did Mexico’s Peso
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Asian stocks mostly took a beating Monday on the first full session of the year’s second half.
As usual these days, trade worries were at the heart of market weakness. Mainland Chinese stocks, especially, notched up sharp falls as investors looked nervously to July 6. That's the day, US tariffs on $34 billion of Chinese products are set to take effect, with Beijing sure to impose its own.
The Shanghai Composite was down 1.2% on Monday afternoon, with most regional indexes also down. Hong Kong's Hang Seng provided the only patch of green, while the Nikkei 225 shed 1.9%.
In the foreign exchange space the Euro was hit by news that Germany’s interior minister had offered to resign over immigration policy, while the Mexican Peso gained strongly as voters handed leftist Andres Manuel Lopez Obrador a clear presidential election victory. The US Dollar held firm against a Japanese Yen which showed no reaction to a quite robust Tankan business survey. The Australian Dollar market seemed focused on Tuesday’s Reserve Bank of Australia monetary policy decision and didn’t move much when China’s Caixin manufacturing Purchasing Managers Index missed forecasts by a whisker.
Still to come on Monday are Purchasing Managers Index releases from around Europe, the US manufacturing snapshot from the Institute for Supply Management, Swiss retail sales and the Eurozone unemployment stats.
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--- Written by David Cottle, DailyFX Research
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