Holiday Season Trade

Asian Stocks Slump, As US-China Trade Tensions Resurface 

Asian stocks slump on May 1 as the trade tensions between the U.S. and China resurfaced. President Trump threatened that he would impose retaliatory tariffs on China over the COVID-19 handling. Above that, the U.S. administration is exploring the blocking of government funds from investing in Chinese stocks. Wall Street finished lower after registering the best month since 1987. 

The Nikkei 225 retreated from eight-week highs today, giving up 2.14% at 20,193, despite a sharp drop in April Consumer Confidence Index down to 21.6 in April, from 30.9 in March; Hong Kong, South Korea, and Singapore were closed for Labor Day. Australian equities also finished higher at 5,461. 

European markets started sharply lower on Friday; the German DAX is 2.22% lower at 10,861. CAC 40 index is 2.12% lower at 4,572, while the FTSE MIB in Milan is 2.09% lower at 17,690. In London, the FTSE 100 is 2.34% lower at 5,762.  

In commodities markets, the crude oil stabilizes after the recent rebound,  supported by better API data on oil inventories. Brent crude trades at $26.48 per barrel, while the WTI crude oil futures contract is 0.42% higher at 18.76. The gold price is under selling pressure, giving up 0.72% at 1,674. The gold first resistance stands at $1,741, the recent high, while the first support stands at $1,670, the daily low. Silver price is 0.74% lower at $14.81. 

trade tensions
BTCUSD Daily Chart

Cryptocurrencies in consolidation mode in a volatile session, Bitcoin’s (BTCUSD) price is 1.79% higher at $8,782, hitting the daily low at $8,571 and the daily high at $8,843. Bitcoin’s (BTCUSD) technical outlook is bullish now, as the price returned above the 200 and 100-day moving average. The first support for BTCUSD is seen at $8,571 the daily low. On the other side, initial resistance stands at $9,485 yesterday’s top.

Ethereum is 3.03% higher, at $212.44. The initial resistance for Ethereum stands at 227.73 the high from yesterday’s trading session, while the first support stands at $206.32, the daily low. Ripple is 3.535% higher at 0.2187. Litecoin is 2.54% higher at 47.57.

In the Lookout: China’s Manufacturing PMI fall to 50.8 from 52.0, and below the forecasts of 51.0. Japanese Consumer Confidence dropped to 21.6 from 30.9, well below the expectations of 27.8. The Japan Tokyo Consumer Price Index, came in at 0.2% below the expectations of 0.4% in April. NIKKEI forecasts that the Japanese economy is set to contract about 22% of the worst GDP figures since World War II.

Japan Jibun Bank Manufacturing PMI came down to 41.9 in April from the previous 43.7.

The Australia Producer Price Index for the first quarter came at 0.2% below the previous reading of 0.3%.

The Eurozone first-quarter GDP slumped to -3.8% from 0.1% in the previous quarter, below the forecasts of -3.7%. Canada’s February GDP dipped to 0.0% from 0.1%, missing the forecasts of 0.2%. US Personal Spending fell to -7.5% from the previous month’s 0.2% and forecasts at -4.8%.

The German Retail Sales plunge 5.6% in March below the forecasts of -7.3%. 

Moody’s Investor Service, forecasted that Italy’s GDP would contract by 9.3% in 2020 while it expects to grow 6.1% in 2021.

Trading Perspective: In the forex markets, the EURUSD is 0.13% higher at 1.0968 after the ECB yesterday kept the interest rates unchanged and announced that it would be no expansion in the Q.E. USDCHF is 0.19% lower at 0.9634. GBPUSD is 0.32% lower at 1.2551; the AUDUSD is 0.93% lower at 0.6448. The Yen is stronger against the USD; the USDJPY is 0.21% lower at 106.90. Commodity and Emerging Market currencies are under pressure amid greenback strength.  

Silver Retreat As Risk Appetite Returns to Markets

Silver price is under selling pressure today as more countries are preparing plans to reopen their economies. Improvement in the coronavirus front and positive news from Gilead’s remdesivir drug on the first clinical trials also boosted investors’ sentiment.  Gold is also under pressure as investors shift their attention from safe heaven assets to more risky assets.

The fundamental data are dismal across the globe, with most of the economies slipping into recession. The US GDP in the first quarter of 2020 fell 4.8%, below the forecasts of 4%. Fed kept the interest rates unchanged, and Chairman Jerome Powell said that the health crisis would have a severe impact on the economy.

(Visited 1 times, 1 visits today)