Asian Stocks Burdened With US-China Trade War, Greenback Strong

Market Reviews

Asian stocks are seriously subdued as today the US will impose its promised tariffs on 34 billion dollars of Chinese imports, known as Section 301. Wang Yi, China Foreign Minister and a State Councilor stated that China will immediately respond with retaliation measures after the Section 301 is evoked.

Shanghai SSE broke 2700 key psychological level but recovered. Hong Kong HSI fell -0.51%. Singapore Strait Times dropped-2.10%. Nikkei rose 0.67%. DOW increased 0.75%. Greenback reinforced ahead of NFP report. Kiwi is trading as the firmest. Japanese Yen is weak. Aussie and Loonie follow suit.

Yesterday’s FOMC protocol noted that hiring was sustained, unemployment rate dropped, growth of household spending improved, business fixed investment rose in a steady pace, headline and core inflation were on track to 2%. But, long term-inflation expectations were little changed as: “Members viewed the recent data as consistent with a strong economy that was evolving about as they had expected.” The US-China trade war was also mentioned as harming the investments.

US ADP private employment marked 177 thousand, while the forecast suggested 180 thousand. Employment component of ISM manufacturing reduced -0.3 to 56.0. Employment component of ISM non-manufacturing fell -0.5 to 53.6. Initial unemployment claims averaged 221.25 thousand in June, holding at its all-time minimum. Conference board consumer confidence declined to 126.4 from 128.8.

Japanese household spending was down -3.9% yoy in May. Labor cash earnings grew 2.1% yoy. Today, Germany will publish industrial production, Swiss will feature foreign currency reserves, US will present non-farm payroll and Canada will issue job data, trade balance and Ivey PMI.