Asian Shares Still Burdened, Yields Riding On Weakness In Yen

Market Reviews

The sentiment is rather calm. Asian stocks kept weakening on trade war jitters. Nikkei fell -0.46%. Hong Kong HSI was down -0.40%. Singapore Strait Times dropped -0.11%. China Shanghai SSE reduced -0.33%. DOW rose 0.44%. S&P 500 increased 0.37%. NASDAQ was up 0.61%. Swiss Franc is trading as the weakest, followed by Japanese Yen. US and European yields significantly reinforced. 5-year yield grew 0.041 to 2.869. 10-year yield surged 0.040 to 2.977. 30-year yield lifted 0.036 to 3.124.

More than 60 US business groups created a coalition “Americans for Free Trade” to start a campaign against Donald Trump’s trade and tariffs policy. Industry groups stated they were opposed to tariffs on USD 200B of Chinese imports. But, the U.S. President responded with raising the stakes and threatening another USD 267B in Chinese goods. The coalition of companies includes Exxon Mobil Corp and Chevron Corp, Target Corp and Autozone Inc., Microsoft Corp, Google owner Alphabet Inc and Apple Inc., Amazon.com, Macy’s Inc and Walmart Inc., IBM Corp and Facebook Inc., Mattel Inc, Hasbro Inc and Barnes & Noble Inc., etc.

Meanwhile, Donald Trump said the US-Canada negotiation is “in good faith”, adding that he is ready to include Canada in the US-Mexican agreement. The President also told: “they want to make a deal very much”, but if we don’t make it, that’s okay too”. Foreign Minister Chrystia Freeland described her yesterday’s meeting with US Trade Representative Robert Lighthizer as: “both sides did a lot of thinking over the weekend, so this was a very productive meeting.” Freeland also noted that” nothing is done until everything is done.” Reuters informed that Canada is open to have concessions on dairy but it would demand concessions on Chapter 19 dispute resolve mechanism.

A source reported that Toshimitsu Motegi, Japanese Economy Minister, will have a meeting with Robert Lighthizer on September 21 in the US. Motegi is expected to keep asking US to rejoin the TPP and Lighthizer will likely insist on bilateral agreement. After the meeting, Japanese Prime Minister Shinzo Abe and Trump will discuss trade at the UN summit on September 25.

Philip Hammond, UK Chancellor of Exchequer, claimed the Brexit deal can be concluded in 6-8 weeks with EU. He told: “there’s merit in having quite a bit of detail, but clearly we don’t have enough time to negotiate the full draft legal text in what will be quite a complex future partnership agreement.”

Japan BSI large manufacturing increased to 6.5 in the third quarter. Australia Westpac consumer confidence declined -3.0% mom in September. Today, Eurozone will publish industrial production, Canada will feature capacity utilization and US will publish Producer Price Index and Fed’s Beige Book report.