Asian Stocks Talking Points:
- Asian stocks were mostly lower again
- Hong Kong’s index took a particular hit, as did its currency
- The Australian Dollar slipped after its central bank held rates yet again
Find out what retail foreign exchange investors make of your favorite currency’s chances right now at the DailyFX Sentiment Page
Asia Pacific equity markets were mostly lower on Tuesday with trade tensions once again glowering over them.
Despite Monday’s news of agreement between the US and Canada, regional worries remain hostage to the enduring spat between Washington and Beijing. White House economic advisor Larry Kudlow said in a television interview on Monday that a trade deal was not imminent and that the President was unsatisfied with the progress of talks. Defense Secretary James Mattis cancelled a visit to China, which was to have taken place later this month.
The mainboards in Sydney, Seoul and Hong Kong were all lower, with the Nikkei 225 still just in the green, having pared gains. It closed 0.1% higher. Shanghai stocks were the only serious trend-buckers, with the Composite there up by more than 1%. Hong Kong’s Hang Seng was under especially heavy pressure, with reports citing lack of progress in trade talks and last weekend’s weaker China manufacturing data as reasons why. The index was down by nearly 2% in its afternoon session with some spillover seen in the Hong Kong Dollar, which was also sharply lower.
The Australian Dollar slipped too after the Reserve Bank of Australia left its Official Cash Rate alone at its now ancient 1.50% record low. This was broadly expected by the dropping of an inflation forecast from its statement had the market believing- rightly or wrongly- that the central bank was less sure about an uptick.
Gold prices edged up as trade tensions took the edge of risk appetite while crude oil prices were up as US sanctions against Iran continue to provide support.
Gold has retraced to lows not seen since January 2017 on its daily chart. However, it has been range-bound since mid -August, possibly as trade-induced reduction in risk appetite has played against the bearish impulse provided by higher US interest rates.
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--- Written by David Cottle, DailyFX Research
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