News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • Further your trading knowledge and gain informed market analyses from our expert analyst @DavidJSong on Oil with our free Q4 guide, available for free today.https://t.co/Y6XECmr5fQ https://t.co/XQI3PN4bkQ
  • Nasdaq 100 may hit new high soon. https://t.co/ACtVqiOBl0
  • HSTECH index has likely formed an "Inverse Head & Shoulders" pattern. https://t.co/YFIQEYmuyq
  • The HSI has likely formed a “Double Bottom” chart pattern, which is usually viewed as bullish-biased. https://t.co/wMQ14A867Q
  • When markets are falling, how can you short sell? Learn more here:https://t.co/K4EFd6A6xd https://t.co/ynjtSQqHVy
  • Futures have their own set of characteristics and appeal to different types of traders and investors for a variety of reasons. Get your free trading guide and learn to trade the markets with futures here. Download your guide today!https://t.co/72oKM0kLHL https://t.co/dLBhWmxuub
  • Relative stability in EUR/USD has masked weakness in the Euro against most other major currencies, and that weakness can be expected to persist in the week ahead and likely for longer. Get your weekly Euro forecast from @MartinSEssex here: https://t.co/g6aCr7Uxg2 https://t.co/KZHBa4GXCN
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/Z8oipLero0
  • Gold prices moved higher last week, but an upbeat US retail sales report underpinned Treasury yields on Friday, which weighed on bullion. Chinese Q3 GDP is in focus for XAU traders. Get your weekly gold forecast from @FxWestwater here: https://t.co/L9JstXgjx0 https://t.co/rCikjEv1Fm
  • Equity traders often focus their approach on specific sectors, designed to fit with their approach and style. What sector are you going to target? Read more to find out!https://t.co/5gbiHmY8yl https://t.co/dzRs61zPlt
US-China Trade Talk Worries Lift Havens, Gold and JPY Strengthen

US-China Trade Talk Worries Lift Havens, Gold and JPY Strengthen

Martin Essex, MSTA, Analyst

US-China trade talks, news and analysis:

  • Hopes are fading that the US and China will agree this week to end their trade war.
  • That is lifting haven assets, which will likely strengthen further if the talks break down.

Trade talk fears damaging market sentiment

Concern is growing in the markets that trade talks this week between the US and China could break down, leading to a flight to haven assets like gold, the Japanese Yen and the notes and bonds issued by the US Treasury. If that is confirmed, more money is likely to flow into them, boosting their prices further.

US President Donald Trump threatened Sunday to levy tariffs on an additional $325 billion of Chinese goods, in addition to the $250 billion of its products already hit by import taxes. He bumped up the rhetoric further Wednesday, saying China “broke the deal” and the Chinese responded by saying they “will not succumb to any pressure”.

That could just be rhetoric ahead of talks Thursday and Friday between the US and Chinese Vice Premier Liu He in Washington but a breakthrough still seems unlikely.

US-China trade war: intellectual property at heart of dispute

Gold and Japanese Yen benefit

So far, the principal beneficiaries of the flight to safety have been gold, the Japanese Yen and the government notes and bonds issued by the US and Germany. While risk appetite could increase if a deal is done, it now seems more likely that the talks will stall, decreasing the attraction of riskier assets like stocks.

Japanese Yen winning the safe haven battle vs USD and gold

Gold Price Chart, Daily Timeframe (November 14, 2018 – May 9, 2019)

Latest gold price chart.

Chart by IG (You can click on it for a larger image)

As the chart above shows, the gold price looks currently to be pausing for breath before potentially extending this year’s gains. However, the Japanese Yen is still advancing strongly against the risk-on Australian Dollar, which is seen in the markets as a proxy for China, and AUDJPY could yet lose more ground.

AUDJPY Price Chart, Daily Timeframe (January 10 – May 9, 2019)

Latest AUDJPY price chart.

Chart by IG (You can click on it for a larger image)

As for US Treasuries, the yield curve looks close to inverting again, seen by some as a sign of economic weakness ahead. With the trade war raising growth concerns, the three-month yield, at 2.428%, is now only just below the 10-year yield of 2.449%.

US Yield Curve (May 9, 2019)

Latest US yield curve chart.

Source: Investing.com

More to read:

A brief history of trade wars

Why a US yield curve inversion matters

How to trade gold: top trading strategies and tips

Resources to help you trade the forex markets:

Whether you are a new or an experienced trader, at DailyFX we have many resources to help you:

--- Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex

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

DISCLOSURES