Stocks Battered Across Board As US-China Trade War Intensifies
APAC Stocks Talking Points:
- Stocks were broadly lower Monday
- The threat of yet more US tariffs on Chinese imports saw to that
- Gold and the Yen were both in vogue
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Asia Pacific stock markets were all lower Monday, unsurprisingly perhaps given the weekend’s increase in trade tensions between China and the United States.
Donald Trump tweeted at the end of last week that the US will increase tariffs hundreds of billions of dollars’ worth of Chinese imports. At the Group of Seven summit over the weekend in France, Trump evinced regret that higher barriers weren’t going up, adding that he could declare the trade war a national emergency.
Given all that, it was hardly surprising that ‘risk assets’ such as stocks and commodity currencies should struggle and they all duly did. The Nikkei 225 was down 2% in the Tokyo afternoon, with the Shanghai Composite down 1%. Australia’s ASX 200 shed 1.4% Australia’s big banks came under pressure, possibly thanks to the idea that record-low rates are likely to head lower unless the global economy picks up. Gold miners were predictably well-bid though.
Hong Kong’s Hang Seng led the way lower after another weekend of violent protests against Beijing in the territory. The index was down nearly 3% at lunchtime.
The Japanese Yen appeared to revel in its haven role, making clear gains on the US Dollar as well as the Australian and New Zealand versions. The offshore Chinese Yuan slipped to a record low against the Greenback of 7.1619. With London out for a holiday Monday, foreign exchange action could be muted as the session goes on.
The Yen was far from the only haven asset in vogue. Gold prices climbed to a new 2019 peak.
Indeed, spot gold is now up to peaks not seen since April 2013, with the highs of that year, $1,675, back in focus for the bulls.
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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.