Asian Stocks Mostly Higher As Trump Shelves China Tariff Plan
Asian Stocks Talking Points:
- Markets posted broad gains even though not all could hang on to them
- The US had abandoned plans to raise tariffs on Chinese imports, citing trade-talk progress
- The ‘risk on’ mood prevailed in currencies too, with the Australian and New Zealand Dollars higher
Find out what retail foreign exchange investors make of your favorite currency’s chances right now at the DailyFX Sentiment Page
Asia Pacific stock markets were broadly higher Monday, with the Shanghai Composite surging by more than 3%, as investors look with new hope to the chances of a trade settlement between the US and China.
Talks are ongoing but President Donald Trump Tweeted on Sunday that he had decided to postpone a planned tariff increase that had been penciled in for March 31, citing progress already made in negotiations. He also held out the possibility of a summit with his Chinese counterpart Xi Jinping if the two can get closer still.
This news gave stocks quite the fillip. Aside from Shanghai’s solid gains, the Nikkei 225 added 0.5%, the ASX 200 0.3% and the Hang Seng 0.4%. Only Seoul’s Kospi failed to hold up, it was down by 0.03% as its close loomed.
In the foreign exchange space risk-sensitive currencies made initial gains on the trade news, with the New Zealand and Australian Dollars gaining at the expense of havens like the Japanese Yen. The Chinese Yuan made seven-month highs against the US Dollar which was overall steady against major traded rivals.
Crude oil prices also made gains – a trade deal would probably mean more demand for oil after all. However they slipped back a little through the session. Gold prices inched up a little through the session.
It’s a quiet Monday for economic data. Mexico’s growth numbers are coming up, as is news of US wholesale inventories.
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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.