Asia market morning update - Trump-Xi meeting delay
The brewing of concerns over US-China negotiations sets Asia up for a mixed start with an eye kept on China’s National People’s Congress closing and the Bank of Japan today.
An April Trump-Xi meeting?
Wall Street concluded the session near neutral with news swivelling of an expected delay to the Trump-Xi meeting. Against earlier expectations of an end-March meeting, officials have been suggesting that a delay would be the case for at least April. Whether this is logistics, or as US trade representative Robert Lighthizer had outlined that there remains ‘major issues’ still unresolved, it is hard to get a read. President Donald Trump had noted that an announcement would be made in three to four weeks. If this is a pre-signing deal, as we know China would like to see following the curve ball thrown during the Trump-Kim summit, it would be a significant one for the markets. As of present, however, this just likely means that we would be kept waiting further on this issue that is obstructing the outlook for markets.
A third Brexit deal vote
Separately, the latest Brexit vote unfolded as expected, pointing to the intention for at least a 3-month delay to the March 29 deadline. As most would have noted by now, the vote is not legally binding and a strong reason would likely be required to convince the EU 27 member states for an extension. Prime Minister Theresa May’s proposal for a third vote on her draft deal looks just to make that happen. However, after two successive rejections, the odds are not in her favour. This could mean the build up of further event risks next week with Prime Minister Theresa May planning to seek the extension at the EU council meeting after her third vote targeted by Wednesday. The no-deal Brexit possibility is still very much present on the table that should induce the intention to seek protection on the downside for the likes of GBP/USD. EUR/GBP break on the downside likewise looks to be fading slightly, one to watch with next week’s event risks in this complex Brexit case.
A mixed open seen thus far for Asia markets, with the lack of inspiration keeping most to a state of neutral. The lack of clarity on the Trump-Xi meeting serves as a dampener for markets into the end of the week, though the attention is on the series of items including China’s National People’s Congress (NPC) closing with Premier Li expected to address the crowd. China’s National People’s Congress will also be looking to place their stamp of approval to a new foreign investment law. Amid the various disputes with the US over the likes of intellectual property and technology transfer, the passing of this law is expected to help with ties, and perhaps by a longer shot, the economy. Look to the details for Asia markets. No changes expected from the Bank of Japan (BoJ) though it will be both the forecasts and any views on their policy toolbox that should interest markets.
Yesterday: S&P 500 -0.087%; DJIA +0.03%; DAX +0.13%; FTSE +0.37%
Live prices on most popular markets
You might be interested in…
Find out what charges your trades could incur with our transparent fee structure.
Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.
Stay on top of upcoming market-moving events with our customisable economic calendar.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.