Fed Minutes Not So Dovish, Scandal Rocks EU, The Trade Deal Is Coming Into Focus

Cautious markets are hopeful a trade deal will be reached soon after sketchy details of possible documents are released to the media.
Thomas Hughes
Dow Jones Index

Asian Markets Are Mixed Following FOMC Minutes

Asian markets were mixed on Thursday following the release of the FOMC’s meeting minutes. The minutes were more and less than what the market expected in that the end of QT is in sight but rate hikes are still on the table. The FOMC, in their discussion, highlighted the mounting risk to global and US economics that can all be traced back to heightened trade tensions between the US and China.

The Australian ASX advanced the most, aided by a 1-2% increase in the Big Banks, posting a gain of 0.70%. The Hong Kong Hang Seng closed with a gain of 0.41% and was supported in the final hours by Lenovo. Lenovo, the world’s largest manufacturer of PCs, reported earnings blowing past expectations. The company has returned to profit sooner than expected and says that profit is sustainable. The company suffered from a one-off tax-hit related to US tax reform that will not impact results in future quarters.

Korean equities were less buoyant despite the release of Samsung’s new phone. Shares of Samsung closed with a gain of only 0.10% while the greater Kospi posted a small loss. The Shang Hai Composite closed with the largest decline but that was only -0.34%.

Europe Rocked By Scandal, Again

EU markets were weighed down by a new scandal in European banking. The latest allegations involve Swedbank and Danske Bank and dubbed serious by regulators. The charges involve cross-border money-laundering and could result in jail time for guilty parties.

The FTSE 100 was showing the most loss at midday, down about -0.75%, as Brexit Angst and weaker than expected PMI readings create another drag on sentiment. The pan-European Markit Flash Manufacturing PMI fell more than expected and into contractionary territory as businesses cut back on activity due to US/China trade relations.

Countering that, Services and other business were strong enough to more than offset the weakness in manufacturing. The Composite PMI rose 3.4 points to 51.4 which shows a net increase in EU economic activity. The DAX was trading slightly higher at midday while the CAC was slightly lower.

A Trade Deal Comes Into Focus

The major US equity indices were trading flat in the early premarket session. The S&P 500 was in the lead with a meager advance, about -0.17%, while the Dow Jones Industrials and NASDAQ Composite were both down about -0.10%. The move is in the wake of yesterday’s FOMC minutes, minutes that show a Fed ready to pounce should business activity reaccelerate, but still supported by trade-related news.

The latest reports say that US and Chinese negotiators are working on documents that would essentially end the trade war. The packet includes six memorandum outlining structural issues and the path to their resolution. The deal also includes a list of ten items China would begin buying from the US among other concessions from both sides.

Today’s economic data is mixed. The initial claims data shows joblessness decreased more than expected, net positive for the dollar, but Durable Goods was only 1.2% and the Philly Fed MBOS fell into negative territory. The data is yet another indication global and US economies are slowing, confirmation US/China trade tensions are hurting both countries.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US