Monday, 2 July 2018
- Asian stocks were narrowly mixed in early trade.
- Trade tensions between the U.S. and its trading partners, most notably China, were in focus, with a wave of tariffs expected to take effect on July 6.
- Oil prices declined following U.S. President Donald Trump’s weekend announcement of what he claimed was an oil production agreement with Saudi Arabia.
Asian stocks were narrowly mixed on Monday, the first trading day of the second half of the year, with trade tensions between the U.S. and its trading partners still a key concern for investors.
In Tokyo, the Nikkei 225 slipped 0.23 percent. In Seoul, the Kospi was little changed, with the index last trading lower by 0.06 percent. The S&P/ASX 200 edged up by 0.14 percent. Wall Street closed slightly higher on Friday, with the Dow Jones Industrial Average rising 0.23 percent, or 55.36 points, to close at 24,271.41.
Although global markets notched gains in the previous session, investors have been cautious over trade tensions between the U.S. and its trading partners, most notably China. U.S. tariffs on $34 billion of Chinese products are expected to take effect on July 6, with China set to retaliate with duties of its own on the same value of American goods.
On the energy front, President Donald Trump unexpectedly announced what he claimed was a new agreement with Saudi Arabia. Trump said in a tweet that Saudi Arabia had agreed to raise production by up to 2 million barrels per day. Trump’s announcement came a week after OPEC reached a decision on increasing oil production after curbing output since 2017 in a bid to boost prices.
Oil prices were lower on Monday, with U.S. West Texas Intermediate crude futures falling 0.94 percent to trade at $73.45 per barrel and Brent crude futures dropping 0.93 percent to $78.49.
The People’s Bank of China (PBOC) set the Yuan reference rate at 6.6157 vs Friday’s fix of 6.6166.