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Asian Stocks Talking Points:

  • Stock markets were lower across the region
  • Trade headlines retain their gloomy power to dampen sentiment
  • The Australian Dollar saw selling pressure increase

The DailyFX Third-Quarter Fundamental and Technical Forecasts are out now,

Trade woes glowered yet again over Asia Pacific markets on Wednesday with markets broadly lower on news that China will request that the World Trade Organization allow it to sanction US goods.

Relations between Washington and Beijing appear to be deteriorating further, with investors quite understandably attempting to gauge likely effects beyond those two huge economies. President Donald Trump announced last Friday that he was prepared to hit China with an additional $267 billion in tariffs. Equity has been hostage to headlines of this sort for some months now (despite a generally strong showing from global economic data over the same period).

Sure enough, all regional bourses fell. The Nikkei 225 was down 0.4% with losses of similar magnitude seen in Shanghai and Hong Kong. Australia’s ASX 200 had the best of things from the bulls’ point of you. It was down too, but only by a whisker. Trade news wasn’t all bad. There does seem to be some progress on talks between the US and Canada, but focus remains overwhelmingly on China.

The US Dollar slipped just a little although a strong underlying haven bid still seems evident. The Australian Dollar was knocked by fears that trade war between China and the US will do its home country little good, and also by domestic consumer confidence numbers which wilted once again. This was understandable given higher mortgage rates and political turmoil last month which saw yet another Prime Minister leave office.

AUD/USD’s relentless downtrend appears only to be intensifying, with 2.5=year lows now reached with no sign that the brakes will be applied anytime soon.

Downtrend Gathers Pace. Australian Dollar Vs US Dollar, Daily Chart

Gold prices slid again, perhaps surprisingly in an atmosphere of elevated risk appetite. However it seems that the US Dollar and the rising interest rates behind it, is the haven of choice now against non-yielding gold.

Crude oil prices clawed back some ground after in initial weak start, with the market looking ahead to inventory data from the US Department of Energy later. The remainder of Wednesday’s economic calendar offers official employment and industrial production data out of the Eurozone.

Resources for Traders

Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

--- Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!