China President Buoyed Sentiment, Aussie and Loonie Are The Strongest

Market Reviews

The Asian markets sentiment have been boosted by news that Chinese President Xi Jinping took a rather peaceful stance in the “US-China trade tension” case. In his speech, the President hardly mention the situation and tried not to make any provocative comments about it. Jinping also expressed his commitment to global multilateral framework like G20, APEC and promised to open up China markets to foreign investments. That will suggest reduced tariffs for autos, increased intellectual property protection and enforced investment protections for foreign businesses. Nikkei rose 0.65%. HK HSI lifted 1.14%. DOW surged to 24373.18 but then dropped to 23979.10.

Meanwhile, Japanese Yen and Swiss Franc are trading as the lowest. Australian dollar, Canadian dollar and New Zealand dollar broadly rose, with the first two ones now trading as the strongest. BoC’s Business Outlook Survey marked an optimistic view at the economy. The survey painted a “healthy” sales prospects, which supported business confidence, “evident” capacity and labor pressures in most regions, caused by improved demand. The Survey stated: “intentions to increase investment continue to be widespread.” And, “employment intentions are solidly positive, based on firms’ plans for hiring to support expected sales growth or to expand operations.” Still, the impact from the US trade policy is present, which lowers the competitiveness.

Mitsuhiro Furusawa (IMF Deputy Managing Director) delivered an opening remarks to the 9th IMF-Japan High-Level Tax Conference for Asian Countries. Furusawa told the global economy keeps on “strengthening on the back of investment and trade”. Capital flows to the emerging market were “resilient”, he noted. The US tax reform will improve growth just “temporarily”.

Australian NAB business confidence fell 2 points, from 9 to 7 in the prior month. Business conditions lowered 6 points, from the maximum of 20 to 14. British BRC retail sales monitor were up 1.4% yoy. Today, we’ll get Canadian building permits, US Purchasing Price Index and wholesale inventories.