Asia market morning update - cautious ahead of the Fed
US-China relations uncertainty
Wall Street concluded near neutral as early optimism leading into the Fed meeting were buffered by concerning reports on US-China trade. News that China had been wavering in commitment on issues such as intellectual property amid the lack of reassurances from the US dampened sentiment into Tuesday. While a pushback from either party does sound like it is part of any reasonable negotiation, the market appears to be pricing in nothing short of smooth discussions towards a resolution at present for US-China trade. This had invited markets to erase the positive start on Tuesday and shrug off President Donald Trump’s comment that ‘talks with China are going very well’.
As it is, one can see US indices little changed over the month of March. Volatility within markets appears to have also been set on low mode with the likes of the Volatility Index, VIX, oscillating 13.0 of late, after falling steadily from around the historical average of 20 from the start of the year. The wait-and-see mode within markets remains a prevalent occurrence and given the lack of directional updates across key issues concerning markets - ranging US-China trade, Brexit, growth trajectory – this may not be a surprise. Watch the Fed coming up for leads on monetary policy. As said, the broad expectations for dovishness could be punctured by the small chance that the Fed continues to see two or more hikes this year. The resultant impact on markets could see both equities and the greenback respond in kind.
Asia open
Against the backdrop of heightened concerns over US-China trade and ahead of the Fed meeting, Asia markets may well trade cautiously once again. Bank of Thailand meeting is expected alongside a couple of tier-2 data, but the broad sense is that regional markets will be attuned towards the Fed meeting. For the likes of the local STRAITS (STI), it does look like the consolidation may well continue between 3183 and 3278.
Yesterday: S&P 500 -0.01%; DJIA -0.10%; DAX +1.13%; FTSE +0.34%
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
