Reliance Trading Co. Limited – Asian Markets Cautious – China, US Trade War and Earnings Season

Stocks began the week on a cautious note as doubts on the possibility for progress ahead of a potentially pivotal week for U.S.-China trade talks crept back into markets.
By: Reliance Trading Co. Limited
 
 
As March 1 Draws Closer - Still no Resolution Between China and the US
As March 1 Draws Closer - Still no Resolution Between China and the US
 
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WAN CHAI, Hong Kong - Feb. 10, 2019 - PRLog -- Resurgent worries on global growth are driving bonds higher and threatening to dent this year's rally in riskier assets, with equities dipping last week. Shares in Sydney edged lower along with those in South Korea. Equities opened little changed in Hong Kong, and ticked higher in China where exchanges reopened after a one-week holiday. Japan is shut for a holiday, so Treasuries won't trade until the London open after 10-year yields edged down to 2.63 percent last week.

The U.S. and China may struggle to reach a deal before the March 1 deadline for higher tariffs, while warnings mount that the dispute is curbing the global economic expansion and denting corporate profits. Chinese Vice Premier Liu He will join Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer in Beijing for high-level trade talks this week. In Washington, the U.S. government could be headed for another shutdown as political tensions flare between Congress and the president.

Elsewhere, iron ore is being rocked by the crisis at Brazil's Vale SA, with prices surging to the highest in years on concern over a supply crunch. The New Zealand dollar edged up from a two-week low, while crude held below $53 a barrel.

Here are some key events coming up:

Earnings season continues with reports from companies including Vivendi, Nvidia, Cisco, Nestle, Coca-Cola, Credit Suisse, Michelin and Nissan. Sweden's Riksbank is expected to keep interest rates at minus 0.25 percent on Wednesday after the first increase in more than seven years in December. Data Wednesday is expected to show U.S. consumer prices rose 0.1 percent in January, after falling 0.1 percent in December. If no deal is reached on the U.S-Mexico border wall, parts of the federal U.S. government may shut down again later this week when stopgap government funding expires.

These are the main moves in markets:

Stocks

The MSCI Asia Pacific ex Japan Index fell 0.1 percent as of 9:45 a.m. in Hong Kong. Australia's S&P/ASX 200 Index slid 0.5 percent. Hong Kong's Hang Seng Index was little changed. Shanghai Composite Index rose 0.1 percent. Futures on the S&P 500 Index slipped 0.1 percent. The underlying gauge rose 0.1 percent Friday.

Currencies

The yen slid 0.1 percent to 109.80 per dollar. The offshore yuan added 0.2 percent to 6.7732 per dollar. The euro was flat at $1.1327.The British pound bought $1.2938.

Bonds

Australia's 10-year bond yield held at 2.10 percent. The yield on 10-year Treasuries declined three basis points to 2.63 percent Friday.

Commodities

West Texas Intermediate crude slid 1.3 percent $52.02 a barrel. Gold lost 0.2 percent to $1,313.91 an ounce.

About Reliance Trading Co. Limited

Experienced, local and independent, we have deep knowledge of markets and what causes change; we have local roots in Hong Kong but maintain a global reach and worldview; and we're a truly independent business which allows us to give you sound investment advice based on facts, not spin.

We started with one goal in mind: provide custom investment portfolios to fit your specific investment needs. Our client's love that we're able to tap into all of the same data, information and resources as larger investment houses, all the while offering a bespoke service to each and every client, as their situation requires.

Visit www.reliancetradingco.com to view our products and services, or contact us at info@reliancetradingco.com to discuss your wealth management future.

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Reliance Trading Co. Limited
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