Morning Report APAC: Trump trade moves hit Asia hardest
- Asian stocks followed their US counterparts lower after Trump’s tarffs on China
- Equity indexes from Tokyo to Hong Kong tumbled more than 3% in early trade
- JPY now moves past 105 per USD for the first time since November 2016
- China announced plans for reciprocal tariffs on $3 billion of US imports
By Saxo APAC Sales Trading
Economic data of the day (Singapore Time)
- 20:00: RU – Bank of Russia Governor Nabiullina holds news conf.
- 20:10: US – Fed's Bostic Speaks on the Economic Outlook
- 20:30: EU - BOE's Vlieghe speaks in Birmingham.
- 22:30: US - Fed's Kashkari Speaks in Moderated Q&A
- 22:30: US - Fed's Kaplan Speaks in Austin, Texas
Trade war: US President Donald Trump put levies on at least $50 billion in Chinese imports. Now the trade office has 15 days to come up with a list of products that will face higher tariffs.
He also instructed Treasury Secretary Steven Mnuchin to propose new investment restrictions on Chinese companies within 60 days to safeguard technologies the US views as strategic. As he signed the order, Trump told reporters: "This is the first of many."
US Equities sold off between 2.5% and 2.9% and Treasuries rallied. The 10 year yield dropped 8 bps on a strong risk off day and CrossJPY sold off in FX.
China will return fire, according to its ambassador to the US. "We don't want a trade war, but we are not afraid of it," Cui Tiankai said in a video.
The measures are all based on Cold War-era laws meant to protect domestic industries, but which have been rarely used since the WTO started in 1995, the official Xinhua News Agency writes.
Bank of England: The Bank of England kept the rates unchanged at 0.50% as expected. The market is pricing a 90% of rate hike in the next meeting.
The MPC said on Thursday its “best collective judgment” was that an ongoing tightening of monetary policy over the forecast period would be appropriate.
“All members agreed that any future increases in bank rate were likely to be at a gradual pace and to a limited extent.
Foreign exchange movements
– Edited by Adam Courtenay
This report was compiled by the Saxo APAC Sales trading team in Singapore – the home of social trading. Follow the team on @SaxoStrats or post your comment below to engage with Saxo Bank's social trading platform. Follow us on @SaxoStrats on Twitter
All material contained herein is provided for your general information. The information and commentaries are not intended to be and do not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort offered or endorsed by Saxo Capital Markets Pte. Ltd. (“SCM SG”). Any expression of opinion (which may be subject to change without notice) is personal to the presenter and/or author; they do not reflect the view or opinion of SCM SG or its affiliates, neither do they constitute an endorsement of SCM SG’s view or analysis of the same.
None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. SCM SG does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment based on any commentaries or information provided here.
For further information, please click here.
Saxo Capital Markets Pte Ltd ("Saxo Capital Markets") is a licensed subsidiary of Saxo Bank A/S, an online trading and investment specialist. Saxo Capital Markets serves as the APAC headquarters and holds a capital markets services licence under the Monetary Authority of Singapore; and a commodity broker licence issued by the International Enterprise Singapore. Clients can trade Forex, CFDs, Stocks, Futures, Options and other derivatives via SaxoWebTrader and SaxoTrader, the leading multi-asset online trading platforms.
Trading risks are magnified by leverage - losses can exceed your deposits. Trade only after you have acknowledged and accepted the risks. You should carefully consider whether trading in leveraged products is appropriate for you based on your financial circumstances. Please consider our Risk Warning and General Business Terms before trading with us. Please see full General Disclaimer.
Thousands of serious traders receive free news and analysis from Saxo Capital Markets each day. Saxo Capital Markets never sends these emails unsolicited; they are sent following acceptance of your membership and subscription request by Saxo Capital Markets at saxomarkets.com.sg. If you do not wish to receive any emails from Saxo Capital Markets in the future, please reply to this email with the word "UNSUBSCRIBE" in the subject header.
Samsung Hub | 3 Church Street | # 30-01 | Singapore 049483
Company No. 200601141M