Tuesday 4th December: Markets fizzle out after gaining on US-China deal prospects

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Tuesday 4th December: Markets fizzle out after gaining on US-China deal prospects 1

Global Markets:

  • Asian Stock Markets : Nikkei down 2.34%, Shanghai Composite up 0.31%, Hang Seng down 0.08%, ASX down 1.01%
  • Commodities : Gold at $1242.80 (+0.26%), Silver at $14.57 (+0.46%), Brent Oil at $62.37 (+1.10%), WTI Oil at $53.55 (+1.13%)
  • Rates : US 10-year yield at 2.942, UK 10-year yield at 1.315, Germany 10-year yield at 0.300

News & Data:

  • (AUD) Cash Rate 1.50% vs 1.50% expected
  • (AUD) Current Account -10.7B vs -10.2B expected
  • (USD) ISM Manufacturing PMI 59.3 vs 57.5 expected
  • (GBP) Manufacturing PMI 53.1 vs 51.6 expected
  • (AUD) Company Operating Profits q/q 1.90% vs 2.90% expected
  • (AUD) Building Approvals m/m -1.50% vs -1.40% expected
  • Japan Q3 GDP Seen Lower on Weaker Capex
  • Key yield curve hits flattest in 11 years; 3-year and 5-year note invert for first time since 2007

Markets Update:

Asian shares fell on Tuesday as a relief rally petered out amid rising doubts over whether China and the United States will be able to resolve trade differences. An inverted U.S. yield curve also raised concerns about a possible recession.

The Australian market is declining despite the overnight gains on Wall Street amid doubts over whether the U.S. and China could resolve their trade disputes in ninety days.

The mainland Chinese markets, which have been closely watched in relation to Beijing’s trade war with Washington, were largely unchanged by the end of the morning session. Both the Shanghai composite and the Shenzhen composite were near flat. In Hong Kong, the Hang Seng was not very dissimilar. Elsewhere in Asia, Japan’s Nikkei 225 fell by 2.34 percent in afternoon trade while the Topix index shed 2.26 percent.

On Tuesday, the yield on benchmark 10-year Treasury notes fell to 2.9407 percent compared with its U.S. close of 2.991 percent on Monday. The two-year yield also fell, but by a narrower margin, touching 2.8028 percent compared with a U.S. close of 2.833 percent. That put the spread between 10-year and two-year Treasuries at less than 14 basis points, its flattest level since July 2007. In the currency market, the dollar index, which tracks the greenback against a basket of peers, softened 0.2 percent to 96.808.

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