Equities Consolidate As Trade Ware Worries Linger, USD/CNY Rises To 7.07

Equities Consolidate As Trade Ware Worries Linger, USD/CNY Rises To 7.07

Swissquote Ltd  | Aug 12, 2019 11:21

Risky assets started the week off in a modestly positive posture with equity future-index blinking green across the screen with several Asian markets closed for a holiday. Chinese equities were better bid with the CSI 300 rising 1.80% on the back of a slightly dovish 2Q monetary report from the PBoC. On Monday, the Chinese central bank set the USD/CNY exchange rate to 7.0211, up 0.11% from Friday. Released on Friday, the report suggests that the PBoC will maintain an accommodative monetary policy stance and added that “Policies will be preset or fine-tuned based on changing situations, and attention will be paid to stabilize and guide expectations”. The monetary institution also left the door wide open for further yuan depreciation should the economic situation; understand here: if the trade war with the US worsens.

Risky assets started the week off in a modestly positive posture with equity future-index blinking green across the screen with several Asian markets closed for a holiday. Chinese equities were better bid with the CSI 300 rising 1.80% on the back of a slightly dovish 2Q monetary report from the PBoC. On Monday, the Chinese central bank set the USD/CNY exchange rate to 7.0211, up 0.11% from Friday. Released on Friday, the report suggests that the PBoC will maintain an accommodative monetary policy stance and added that “Policies will be preset or fine-tuned based on changing situations, and attention will be paid to stabilize and guide expectations”. The monetary institution also left the door wide open for further yuan depreciation should the economic situation; understand here: if the trade war with the US worsens.

Against such a backdrop, safe-haven assets slid in negative territory. The yellow metal fell 0.33% to $1,492, while silver gave up 0.63% to $16.88. USD/JPY rose 0.27% in early European trading, up to 0.9752. Only the Japanese yen appreciated against the greenback with USD/JPY falling 0.30% to 105.37, which suggests that trade war negotiations are keeping investors on their toes.

Looking at the economic calendar, it is going to be a busy week. UK June labor data are due for publication on Tuesday (unemployment rate expected flat at 3.8%), together with the German ZEW (expected at -6.3 versus -1.1 previous) and US CPI (headline expected at 1.7%, up from 1.6% in June and core measure stable at 2.1%). On Wednesday, the UK, Germany, France, and Sweden will publish their inflation data for the month of July. On Thursday, the US will release July’s retail sales figures and industrial production gauge.

"Disclaimer: While every effort has been made to ensure that the data quoted and used for the research behind this document is reliable, there is no guarantee that it is correct, and Swissquote Bank and its subsidiaries can accept no liability whatsoever in respect of any errors or omissions, or regarding the accuracy, completeness or reliability of the information contained herein. This document does not constitute a recommendation o sell and/or buy any financial products and is not to be considered as a solicitation and/or an offer to enter into any transaction. This document is a piece of economic research and is not intended to constitute investment advice, nor to solicit dealing in securities or in any other kind of investment.

Although every investment involves some degree of risk, the risk of loss trading off-exchange forex contracts can be substantial. Therefore if you are considering trading in this market, you should be aware of the risks associated with this product so you can make informed decisions prior to investing. The material presented herein not to be construed as trading advice or strategy. Swissquote Bank makes a strong effort to use reliable, expansive information, but we make no representation that it is accurate or complete. In addition, we have no obligation to notify you when opinions or data in this material change. Any prices stated in this report are for information purposes only and do not represent valuations for individual securities or other instruments."

Against such a backdrop, safe haven assets slid in negative territory. The yellow metal fell 0.33% to $1,492, while silver gave up 0.63% to $16.88. USD/JPY rose 0.27% in early European trading, up to 0.9752. Only the Japanese yen appreciated against the greenback with USD/JPY falling 0.30% to 105.37, which suggests that trade war negotiations are keep investors on their toes.

Looking at the economic calendar, it is going to be a busy week. UK June labour data are due for publication on Tuesday (unemployment rate expected flat at 3.8%), together with the German ZEW (expected at -6.3 versus -1.1 previous) and US CPI (headline expected at 1.7%, up from 1.6% in June and core measure stable at 2.1%). On Wednesday, the UK, Germany, France and Sweden will publish their inflation data for the month of July. On Thursday, the US will release July’s retail sales figures and industrial production gauge.

"Disclaimer: While every effort has been made to ensure that the data quoted and used for the research behind this document is reliable, there is no guarantee that it is correct, and Swissquote Bank and its subsidiaries can accept no liability whatsoever in respect of any errors or omissions, or regarding the accuracy, completeness or reliability of the information contained herein. This document does not constitute a recommendation o sell and/or buy any financial products and is not to be considered as a solicitation and/or an offer to enter into any transaction. This document is a piece of economic research and is not intended to constitute investment advice, nor to solicit dealing in securities or in any other kind of investment.

Although every investment involves some degree of risk, the risk of loss trading off-exchange forex contracts can be substantial. Therefore if you are considering trading in this market, you should be aware of the risks associated with this product so you can make informed decisions prior to investing. The material presented here in not to be construed as trading advice or strategy. Swissquote Bank makes a strong effort to use reliable, expansive information, but we make no representation that it is accurate or complete. In addition, we have no obligation to notify you when opinions or data in this material change. Any prices stated in this report are for information purposes only and do not represent valuations for individual securities or other instruments."

Swissquote Ltd

Related Articles

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Discussion
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (India) English (Canada) English (Australia) English (South Africa) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 中文 香港 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
NoYes
CancelYes
Saving Changes

+