Archives of “March 2019” month

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US and China said to be poring over details of text to end trade war

  
  Analysis

Bloomberg reports

Says that negotiators from both sides are working line-by-line through the text of an agreement that can be put before Trump and Xi to defuse the current trade war. It is said that meetings in Beijing yesterday and today were partly to ensure that there were no discrepancies in the English and Chinese versions of the text.

The developments here should be an added positive for risk sentiment and will continue to keep the aussie and kiwi underpinned as we begin the session.

Nikkei 225 closes higher by 0.82% at 21,205.81

  
Analysis, Global Indices

Tokyo’s main index climbs on calmer risk tone in markets

Asian equities are generally performing better on the day after a more composed session seen in Wall Street overnight. Bond yields are generally holding steady today as well and that is helping to see risk assets more stable ahead of European trading.

USD/JPY is holding a tad higher at 110.70 currently, off highs posted earlier around 110.93. Despite the slightly more optimistic risk tone and US-China continuing trade talks, there’s still a hint of caution in markets right now so just be wary that things could easily flip on its head in the coming sessions.

Reuters poll of analysts on Fed outlook – most expect no hike this year

  
  Analysis

The previous poll on the outlook, taken just two weeks ago, had the majority expecting on more hike in 2019

  • the latest Reuters poll of over 100 economists taken after the March 19-20 central bank meeting showed the fed funds rate will stay at the current range of 2.25-2.50 percent until at least end-2020.
  • A smaller sample of economists with an end-2021 view predicted no change by then either.
  • “The most dramatic development of the year to date has not been on either trade policy or politics. Rather, it is the Fed’s full-throated embrace of a monetary stance more dovish than many market participants had been expecting,” noted Ajay Rajadhyaksha, head of macro research at Barclays.
The full piece is here (link) …you may not agree with the surveyed economists (there is a range of views anyway) but worth checking out their reasoning, comments etc.
The previous poll on the outlook, taken just two weeks ago, had the majority expecting on more hike in 2019

China’s two largest state-controlled banks post their weakest quarterly profit growth in more than two years.

  
Analysis, Economy

Reuters reporting on Industrial and Commercial Bank of China (ICBC) and China Construction Bank Corp

  • ICBC flat net profit for the fourth quarter, the first time it has seen no growth in a quarter since the July-September 2016 quarter
  • Construction Bank posted a 1 percent drop in net profit, its first quarterly decline since the October-December 2015 quarter
More
  • non-performing loan (NPL) ratios edged down by 0.01 percentage points at each bank
  • both increased their provisions for future bad debt
  • “We deeply feel it’s quite difficult to maintain the low bad loan level. There are external factors, our own reasons, problems with multi layers of local governments and other pressure,” said Xu Yiming, CCB’s chief financial officer, in Beijing on Thursday.”Do not think we are doing so well with 1.46 percent NPL ratio. It is very fragile. Once the environment changes, it can increase.”
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