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James Hyerczyk
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Asian stocks are under pressure early Tuesday, following the lead from Wall Street which produced mixed results. In New York on Monday, the technology-driven NASDAQ Composite eked out a small gain, but the blue chip Dow Jones Industrial Average settled more than 100 points lower while the blue chip S&P 500 Index closed 11.90 points lower.

Early in the Asia session, Japan’s Nikkei 225 index is trading 22318.92, down 295.90 or -1.31%. Australia’s S&P/ASX 200 is trading 5859.40, down 45.50 or -0.77%.

U.S.-China trade relations remain the focus for traders. Things heated up somewhat on Monday when a Chinese official told American Investors at a meeting that Beijing did not “fear” a trade war with Washington.

“China never wants a trade war with anybody, not to mention the U.S., who has been a long-term strategic partner, but we also do not fear such a war,” Zhang Qingli, a leading member of a Chinese committee tasked with forging alliances with other nations, said through a translator at the meeting in Beijing. That was according to a meeting attendee who declined to be named.

Forex Markets

The U.S. Dollar surged against a basket of currencies on Monday with most of the move supported by a steep plunge in the Euro. The dollar was also underpinned by a weaker British Pound. Diminished safe-haven demand helped pressure the Swiss Franc and Japanese Yen. The Australian Dollar, a proxy for China’s economy, fell due to its exposure to Chinese demand.

The Euro gave back early gains as investors expressed worries over the likelihood of further political uncertainty in Europe over Italy’s spending plans, despite a large drop in Italian government borrowing costs.

The British Pound fell on news that Brexit negotiations with the European Union over Northern Ireland remain in flux.

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Gold

Gold prices retreated on Monday in reaction to a stronger U.S. Dollar. Low demand at current price levels also suggests a potentially overvalued market. Stronger Chinese stock markets also weighed on prices, but a mixed performance in U.S. equity markets and a slight dip in U.S. Treasury yields provided some support.

Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures settled slightly higher on Monday after paring earlier losses. The price gain came as a surprise since Saudi Arabia once again pledged to raise crude production to a record high to offset lost production from Iran due to the start of U.S. sanctions on November 4.

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