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Thursday, 2 August 2018

  • Asia markets were cautious in early trade following an overnight mixed session on Wall Street.
  • The Trump administration was looking at the possibility of slapping a 25 percent tariff on $200 billion worth of imported Chinese goods, which would further escalate trade tensions.
  • The Federal Reserve left interest rates unchanged after a two-day meeting on monetary policy but upgraded its view on the U.S. economy, calling it “strong.”
  • Reserve Bank of India increased the interest rate to 6.5%.

Asia markets were cautious in early trade on Thursday, following an overnight mixed session in the U.S. as renewed trade concerns offset strong gains in tech.In Australia, the benchmark ASX 200traded near flat as the materials subindex declined 1.24 percent. Japan’s Nikkei 225 was down 0.21 percent while the Topix index traded near flat. In South Korea, the Kospi was down 0.14 percent.

The Trump administration announced it is looking at the possibility of slapping a 25 percent tariff on $200 billion worth of imported Chinese goods — from the initial 10 percent announced earlier. This comes after China said that blackmail will not work on them and that they would retaliate against the U.S. if additional trade measures are imposed.

The Federal Reserve concluded a two-day meeting on monetary policy and left interest rates unchanged. The Wednesday decision was widely expected, but the central bank upgraded its view on the economy, calling it “strong.”

The U.S. dollar traded at 94.638 against the dollar index basket of currencies, rising from levels below 94.500 earlier in the week. The People’s Bank of China (PBOC) set the yuan reference rate at 6.7942 vs the previous day’s fix of 6.8293.

Oil prices fell about 2 percent overnight following a surprise increase in U.S. crude inventory that led to renewed concerns about oversupply. U.S. crude inventories rose 3.8 million barrels in the previous week as imports jumped. The market was expecting a decrease of 2.8 million barrels. U.S. crude futures fell 1.6 percent to $67.66 a barrel while global benchmark Brent lost 2.5 percent to $72.39 a barrel.

Source : Reuters

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