Archives of “May 2019” month

rss

China – US trade talks. Background on what the US sees as China reversals on agreements.

  
  Analysis

While we await anything from the negotiations underway in Washington Thursday evening (and that  are scheduled to continue on Friday), this via Reuters.

ICYMI, or a refresher, Reuters with a report where they cite three U.S. government sources and three private sector sources briefed on the talks:
  • diplomatic cable from Beijing arrived in Washington late last week
  • with systematic edits to a nearly 150-page draft trade agreement
  • document was riddled with reversals by China that undermined core U.S. demands
  • In each of the seven chapters of the draft trade deal, China had deleted its commitments to change laws to resolve core complaints that caused the United States to launch a trade war
There is plenty more at the piece, link is here.
If the talks this week fail the next escalation in the trade war hits, some time in the next day or so.
While we await anything from the negotiations underway in Washington Thursday evening (and that  are scheduled to continue on Friday), this via Reuters. 

Pres. Trump: US cannot have China trying to renegotiate the trade deal

  
  Analysis

Pres. Trump speaking to reported

He adds:
  • We will see on the China deal
  • He has received a letter from China Pres. Xi
  • He has an excellent alternative to China deal
  • trade negotiations will continue at 5 PM ET
  • will speak with Xi by phone soon
  • nobody’s happy about North Korea missile launches
This is a letter that Pres. Trump received from No. Koreas Kim Jung Un.   I wonder if Xi’s letter was just as impactful?

European shares end with sharp declines on trade concerns

  
Analysis, Global Indices

US stocks sharply lower as well after first 3 hours of trading

The major European indices are ending the session was sharp declines as trade concerns weigh on global growth worries.  The provisional closes are showing:
  • German DAX, -1.7%
  • France’s CAC, -2.0%
  • Britain’s FTSE, -1.0%
  • Spain’s Ibex, -1.5%
  • Italy’s FTSE MIB, -1.8%

In the benchmark 10 year yields, yields are mostly higher on risk off concerns. The German 10 year is down marginally and the UK 10 year is also lower by -1.5 bps:

US stocks sharply lower as well after first 3 hours of trading. 10 year yields are mostly higher.

In the US, the major indices are sharply lower but off the session lows:
  • S&P index 2843.88, -35.6 points or -1.24%. The low reached 2836.40
  • NASDAQ index 7829, -114.71 points or -1.45%. The low reached 7796.16
  • Dow industrial average 25559.78, -407 points or -1.58%. The low reached 25517.39
European and US stocks are trading sharply lower on trade concerns

USDJPY stays below a topside trend line.

  
Analysis, Forex

Lower on the day.  What will stocks do

The USDJPY is staying below a topside trend line today. That comes in at 109.85 currently (and moving lower – see red circles).
Lower on the day.  What will stocks do
I have put a lower trend line in connecting the most recent lows. That comes in at 109.52 currently (and also moving lower).
Below that is an even lower trend line at 109.08 (not shown – line outside of chart above).
Taking a broader look at the daiy chart. The price today moved below the March 25 low at 109.696 on the way to the low. A move back below and staying below that level will be eyed by traders now.  We currently trade at 109.75.
 If you ignore the flash crash from January 3rd, the 61.8% of the move down comes in at 109.372. That is a target on more selling today.
The USDJPY on the daily chart

US initial jobless claims 228K vs 220K estimate

  
  Analysis

The US Initial jobless claims for the current week

  • US initial jobless claims 228K versus 220K estimate. Last week 230K
  • continuing claims 1684K vs 1670K  estimate.  Last week 1671K
  • The 4- week MA 220.25K vs 212.5K
  • The largest increases in initial claims for the week ending April 27 were in New York (+6,532), New Jersey (+3,041), Mississippi (+825), Delaware (+782), and Texas (+645),
  • The largest decreases were in Massachusetts (-6,632), California (-3,588), Rhode Island (-2,466), Connecticut (-1,777), and Illinois (-831).

China says that it firmly opposes sanctions against Iran

  
  Analysis

Further comments from China’s commerce ministry

China
  • Says that Iran is an important trading partner to China
  • Says that US sanctions on Iran oil will worsen volatility in oil markets
  • Reiterates that it will defend its firms’ rights in the situation
While trade tensions continue to brew, there’s also another issue involving US and China and that is the situation in Iran. The US is looking to step up sanctions against Iran but so far, China is maintaining their resolve in stating that they will continue to keep trade relations with Iran despite fresh sanctions being levied.

North Korea said to have fired unidentified projectile

  
Analysis, Politics

Yonhap reports, citing a leading South Korean official

No further details at this point, but I’ll update if there’s anything worth noting. I would assume it’s just another missile test but you can never really rule out anything these days.

Update: Projectile launch was said to be at 1630 local time and was fired eastward from northwest. Doesn’t look like it’s anything too serious but this continues to undermine the “trust” in the relationship between Kim and Trump surely.
Go to top