Morning Report

Asia stocks decline after China reports weaker than expected trade data; Japan falls more than 2 percent

  • Stocks in Japan and South Korea fell in early trade, while shares in Australia also saw losses in the morning.
  • Chinese trade data for November came significantly below expectations over the weekend.
  • U.S. Trade Representative Robert Lighthizer told CBS in an interview Sunday that the end of the 90-day pause in tariff escalation between Washington and Beijing in their trade war is a “hard deadline.”

Stocks in Asia traded lower Monday morning following significantly weaker-than-expected Chinese trade data released over the weekend.

Japan’s Nikkei 225 fell more than 2 percent in early trade while the Topix index dropped 1.88 percent. Meanwhile, South Korea’s Kospi also slipped 1.45 percent.

Over in Australia, the ASX 200 fell 1.71 percent earlier in morning trade to touch lows not seen since Dec. 2016, with almost all sectors seeing losses.

Chinese November trade data dwindles

China reported notably weaker than expected November exports and imports, which pointed to slower global and domestic demand and raised the possibility that Beijing may undertake more measures to boost growth.

November exports rose 5.4 percent from a year earlier, according to Chinese customs data on Saturday, which was below the 10 percent jump predicted by a Reuters poll. That number was also the weakest performance since a 3 percent contraction in March. The customs data showed that annual growth for exports to all of China’s major partners slowed significantly.

Import growth was 3 percent, the slowest since October 2016, and a fraction of the 14.5 percent expected in the Reuters poll. Imports of iron ore fell for a second time, reflecting waning restocking demand at steel-mills as profit margins narrow.

Hard deadline’ on US-China trade war pause

U.S. Trade Representative Robert Lighthizer told CBS in an interview on Sunday that the end of the 90-day pause in tariff escalation between Washington and Beijing in their trade war is a “hard deadline.”

“As far as I am concerned it is a hard deadline. When I talk to the president of the United States he is not talking about going beyond March,” he said on the CBS show “Face the Nation,” referring to President Donald Trump’s decision to delay tariffs imposition until March 1 while talks proceed.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.661 after touching highs around the 97.2 handle last week.

The Japanese yen, widely viewed as a safe-haven currency, traded at 112.52 after seeing lows around 113.8 last week. The Australian dollar was at $0.7188 after touching highs around $0.739 in the previous week.

Brent oil prices rise after OPEC-led group announces 1.2 million bpd supply cut

International oil prices rose on Monday, extending gains from Friday when producer club OPEC and some non-affiliated producers agreed a supply cut of 1.2 million barrels per day (bpd) from January.

International Brent crude oil futures were at $61.81 per barrel , up 14 cents, or 0.2 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $52.35 per barrel, 26 cents, or 0.5 percent, below their last close, weighed down as America’s booming oil drilling industry is not taking part in the announced cuts.

Japan, the world’s third biggest economy and No. 4 oil consumer, on Monday revised its third quarter GDP growth down to an annualized rate of -2.5 percent, down from the initial estimate of -1.2 percent.

Source : Reuters

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