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Asian Stocks Slip As Trade Worries Reemerge, Fed Decision Eyed

Asian Stocks Slip As Trade Worries Reemerge, Fed Decision Eyed

David Cottle, Analyst


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Asian Stocks Talking Points:

  • Mainboards were mostly lower in the region
  • Hopes for a near-term trade settlement between the US and China have taken a little knock
  • In the meantime focus returns to Washington where the Fed is expected to be dovish

Find out what retail foreign exchange investors make of your favorite currency’s chances right now at the DailyFX Sentiment Page

Asia Pacific stocks were mostly lower Wednesday as new uncertainties over trade between the US and China tempered risk appetite.

Much of these seem to have their roots in a Bloomberg article which reported that US authorities are worried China may be pushing back against their demands. Chinese negotiators meanwhile are reportedly concerned for their part that they have not received any assurances that tariffs recently imposed would be lifted if a deal were struck.

Sure enough the Shanghai Composite was down 1% in the middle of its afternoon session. The Hang Seng had slipped 0.5% and the ASX 200 0.3%. The Nikkei 225 was in the green but only just.

The markets are also focused of course on this month’s monetary policy meeting of the Federal Reserve which will give its decision on Wednesday (early Thursday Asia Pacific time). A degree of dovishness is expected from the US central bank, with perhaps fewer rate increases expected this year.

Even so the US Dollar was generally stronger through the session as those trade worries prompted a haven bid for the currency. That bid wasn’t universal by any means however. Gold prices slipped on that stronger greenback,

USD/JPY remained within the daily-chart uptrend which has characterized trade for most of this year.

US Dollar Vs Japanese Yen, Daily Chart

The key psychological resistance level of JPY112 remains too much for this market on a daily-closing basis however, and the bulls need to press their case soon or risk a slip back below that downtrend line.

Crude oil prices slipped back from four-month highs as growth concerns returned to weigh on demand forecasts.

Wednesday’s global economic data schedule will offer February’s official inflation figures from United Kingdom, with US mortgage application and crude oil inventory levels coming up too.

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!

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.