Futures Flat, Trade Tensions In Focus, China Won’t Back Down

Trade relations remains in focus and geopolitical risk escalates after China indicates it won’t back down to U.S. demands.
Thomas Hughes
Wall Street Bull

The U.S. Futures Are Flat In Early Trading

The U.S. futures are flat in early Monday trading. Trade tensions remain in focus albeit the messages remain mixed. President Donald Trump says the U.S. isn’t ready to make a deal with China but also that a deal will come soon. China, through a media mouthpiece, has suggested it won’t back down to U.S. demands. The impasse is seemingly unsolvable and likely to last far longer than first anticipated.

Meanwhile, the U.S. is making moves to conclude trade deals with just about every one of its partners except China. With tariffs removed from Canadian and Mexican metals and a deal with the EU and Japan likely, there is little reason to fear a global recession; growth will happen, just not in China. The Dow Jones Industrial Average, the S&P 500, and the NASDAQ Composite are all indicated to open with little to no movement.

In economic news, the yield on the 10-year Treasury rebound from Friday lows. The yield curve remains inverted but slightly less so than last week. Later in the day traders will be looking for reports from the Richmond and Dallas Federal Reserve Banks. Later in the week, traders will be on the lookout for the 1st quarter GDP revision and the all-important Personal Income & Spending and Core Consumer Inflation on Friday.

EU Flat And Mixed, Geopolitics In Focus

The EU Indices were flat and mixed in early Monday trading. Geopolitics, including but not limited to U.S./China trade relations, were in focus. Closer to home, EU parliamentary elections concluded over the weekend. The results are generally as expected but far-right nationalist/protectionist factions gained strength. Despite this fact, analysts think the showing put forth by Europhile and liberal parties indicates the EU will remain intact, at least for now. The French CAC led the day’s move with a loss of -.36%, the DAX trailed at -0.25%, and the UK FTSE 100 advanced 0.07% in midday trading.

In the UK, the nationalist “Brexit Party” won elections to the EU parliament. The move is a surprise to many and may pave the way to an easier Brexit situation than looks apparent now. Political turmoil has traders on edge elsewhere in the EU as well. Italy’s growing deficit issue has it at odds with the EU. Banks led the market lower with losses near -0.9%, banks in Italy led the group.

Trade Relations Dim, Chinese Isolation To Continue

Asian markets were broadly higher despite the downturn in U.S./Chinese trade relations. The Shanghai Composite led the advance with a gain of 0.61% with most others not far behind. The Australian ASX is runner-up at 0.51%, the Nikkei and Hang Seng 0.37% and 0.38%, and the Korean Kospi 0.23%. In Japan, shares of Tokyo Electric were among the biggest gainers after announcing a share buyback. In Hong Kong shares of Tencent were at the fore with an advance of 1.0%.

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

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.
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.