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Asia markets keeping high hopes for the trade talks

Markets remain pondering the outcome of the US-China trade talks in the lead up to the December 15 tariffs deadline, seemingly keeping the hopes high going into the Friday session for the Asia region.

In more of the same updates, China officials had reflected ‘close contact’ with US trade representatives, items to keep both sentiment and prices supported. The Dow and the S&P 500 Index had certainly chalked up mild gains in the overnight session, with all but three sectors on the comprehensive S&P 500 index sustaining in green. Likewise, for Asia markets, mild gains look to be the tone kickstarting the Friday against the current backdrop. The wait continues for the outcome of the trade talks with any trade deal pertinent to keep this atmosphere going past next week.

On an intraday basis, the consolidation may well sustain with the wait for the US jobs report where strong expectations had been pencilled in. A consensus 180k is set against the 128k recorded for October while the unemployment rate looks to hold steady at 3.6% and the average hourly earnings one to accelerate moderately to 0.3% month-on-month. Encouraging signs in the form of the Thursday’s jobless claims had shown a smaller than expected reading for end-November. Any outperformance on the payrolls front could be one to provide both the US market and the greenback with a short-term boost. As it is, the US Dollar Index can be seen exhibiting a double top formation that could threaten further downside from here.

OPEC deeper cuts

Meanwhile OPEC and co. were noted to be moving towards deepening the production cut by 500k barrels per day (bpd) from the 1.2 million bpd at present, pending the official announcement today. This should represent a mild boost for crude oil prices, though the fact of the matter remains that both compliance and demand continue to pose challenges for oil prices.

Brent crude oil had averted a slide past $60/bbl with hopes on US-China trade and a drawdown in US crude inventories aiding in the recovery this week. Any deterioration in the on-going US-China trade talks may nevertheless pose the biggest short-term threat for the current trend.

Yesterday: S&P 500 +0.15%; DJIA +0.10%; DAX -0.65%; FTSE -0.70%

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