The major European indexes are trading slightly lower with investors continuing to monitor U.S.-China trade relations, while waiting for direction from the United States markets. Investors are also monitoring political developments in Italy.
The major Asia Pacific stock indexes are trading mostly higher on Tuesday, following the lead from Monday’s strong Wall Street session. The catalyst behind the market’s strength remained the positive developments over U.S.-China trade relations. China said it wants “calm” negotiations. The U.S. says China is willing to resume negotiations. Let’s just leave it at that.
At 08:34 GMT, Japan’s Nikkei 225 Index closed at 20456.08, up 195.04 or +0.96%. Hong Kong’s Hang Seng Index settled at 25664.07, down 16.26 or -0.06% and South Korea’s KOSPI Index finished at 1924.60, up 8.29 or +0.43%.
In China, the Shanghai Index settled at 2902.19, up 38.63 or +1.35% and in Australia, the S&P/ASX 200 index finished at 6471.20, up 31.10 or +0.48%.
This a little controversy brewing in the media as to whether President Trump actually received a phone call from China at which the world’s second largest economy said it wants to resume trade talks. Don’t make a big deal about the events. The two countries will either meet in September or they won’t. That’s all investors need to be concerned about.
According to CNBC, “China fixed the daily midpoint rate for the Yuan at levels not seen for more than a decade on Tuesday as Beijing remains locked in a protracted trade war with Washington.”
The People’s Bank of China (PBOC) set the midpoint at 7.0810 per dollar – weaker than the previous day’s fix, but stronger than the 7.1055 level the market was expecting, according to a Reuters estimate.
China could be signaling to the markets that it may want to slow down the pace of the currency’s depreciation.
China will probably have to raise the Yuan to offset the impact of the new U.S. tariffs.
The major European indexes are trading slightly lower with investors continuing to monitor U.S.-China trade relations, while waiting for direction from the United States markets. Investors are also monitoring political developments in Italy.
At 08:57 GMT, the UK’s FTSE 100 Index is trading 7057.56, down 37.42 or -0.53%. Germany’s DAX Index is at 11631.30, down 26.74 or -0.23% and France’s CAC is at 5330.06, down 19.63 or -0.37%.
The U.S. and France have reached a compromise agreement on France’s digital tax, French President Emmanuel Macron said Monday. CNBC is reporting, “President Trump had earlier threatened to hit France with a retaliatory wine tax over the move, which would see the revenues of large tech companies like Facebook, Amazon and Google hit with a 3% levy.”
In other news, according to CNBC, “Five Star Movement (M5S) and the opposition Democratic Party (PD) appeared on the verge of a deal to form a new Italian government on Monday, after the PD indicated it had abandoned a veto on Giuseppe Conte serving another term as Prime Minister.”
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.