Tuesday 8th January: Asian markets mixed as investors remain cautious of trade talk outcomes

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Tuesday 8th January: Asian markets mixed as investors remain cautious of trade talk outcomes 1

Global Markets:

  • Asian Stock Markets : Nikkei up 0.90%, Shanghai Composite down 0.29%, Hang Seng up 0.23%, ASX up 0.69%
  • Commodities : Gold at $1284.75 (-0.40%), Silver at $15.62 (-0.89%), Brent Oil at $57.38 (+0.09%), WTI Oil at $48.56 (+0.08%)
  • Rates : US 10-year yield at 2.689, UK 10-year yield at 1.255, Germany 10-year yield at 0.224

News & Data:

  • (USD) ISM Non-Manufacturing PMI 57.6 vs 59.6 expected
  • (CAD) Ivey PMI 59.7 vs 58.1 expected
  • Draghi Will Be Passing on Baton With ECB in Populist Crosshairs
  • Fed Positioned to Slow Pace of Rate Hikes – Assuming the Data Cooperate

Markets Update:

Asian stock markets are mixed on Tuesday with investors treading cautiously as they awaited the outcome of the high-level U.S.-China trade talks currently underway in Beijing. The U.S. and China will resume their second day of negotiations on trade today. Deputy U.S. Trade Representative Jeffrey Gerrish is leading the U.S. team at the two-day meeting. Meanwhile, a spokesman for China’s Foreign Ministry said that China is willing to resolve its trade disputes with the U.S. on an equal footing.

Japan’s Nikkei 225 rose about 1 percent in afternoon trade while the Topix index gained 0.65 percent. The Shanghai composite declined by 0.3 percent while the Shenzhen composite and Shenzhen component were largely flat. Over in Hong Kong, the Hang Seng index rose 0.2 percent. The ASX 200 in Australia recovered from earlier losses to see gains of about 0.7 percent, with almost all sectors higher. Over in South Korea, the Kospi was around 0.10 percent lower.

Emerging market currencies also benefited from a weak dollar, with MSCI emerging market currency index rising to levels last seen in late July. The 10-year U.S. Treasuries yield bounced back to 2.698 percent, from Friday’s low of 2.543 percent, a trough last seen almost a year ago. Still, that is more than 50 basis points below its October peak of 3.261 percent. Fed funds rate futures now price in a slim chance of a rate cut this year.

Oil prices also rebounded further from 1-1/2-year lows reached in December, drawing support from a Wall Street Journal report that Saudi Arabia is planning to cut crude exports to around 7.1 million barrels per day (bpd) by the end of January.

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