Morning Report

Monday, 18 June 2018

  • Asian markets slipped on Monday as investors digested U.S.-China trade tensions.
  • The U.S. said it will impose tariffs on $34 billion in Chinese goods beginning July 6. China quickly announced its retaliation.
  • Oil prices slumped amid trade jitters and ahead of OPEC’s meeting later this week.

Asian markets slipped on Monday as investors digested the escalation in trade tensions between the U.S. and China after both countries announced tariffs last week.

Trade is likely to be top of mind for investors after the Trump administration last week said it will impose a 25 percent tariff on a list of 818 items of Chinese goods worth around $34 billion beginning July 6. Measures affecting an additional 284 products worth $16 billion will be subject to review before taking effect.

In response, China said a 25 percent tariff will be implemented on U.S. goods, including soybeans and electric vehicles, worth $34 billion starting July 6. Another list of U.S. imports worth $16 billion will be subject to review before being applied.

Despite the latest dust-up on the trade front, U.S. stocks finished the last session well off the day’s lows. The Dow Jones industrial average slipped 0.34 percent, or 84.83 points, to close at 25,090.48, after losing as much as 280.93 points earlier.

On the energy front, oil prices extended losses after slumping in the last session ahead of OPEC’s meeting in Vienna later this week. The declines also came amid the trade jitters, as energy products had been included in the list of additional U.S. goods that China could target at a later date.

Brent crude futures edged down by 0.48 percent to trade at $73.09 per barrel after settling more than 3 percent on Friday. U.S. crude futures declined 1.15 percent to $64.31.

In foreign exchange, the dollar index, which tracks the dollar against a basket of currencies, last stood at 94.873.

Source : Reuters

June FOMC Highlights and Market Impact

The Federal Open Market Committee, in a statement released after its two-day policy meeting, voted 8 to 0 to increase its fed funds rate by 25 basis points to a range of between 1.75% and 2.00%, as expected.

FOMC officials predicted a total of four rate increases for this year, which is up from a projection of three rate hikes at their March meeting.

The statement appears to be slightly hawkish on balance.

Morning Report

Wednesday, 13 June 2018

Asian markets were mixed in early Wednesday action as investors began to shift their focus from the recently concluded U.S.-North Korea summit to the conclusion of the Federal Reserve’sJune meeting later in the day.

The investors will now focus their attention on upcoming central bank meetings. The Federal Reserve will end its two-day meeting on Wednesday U.S. hours and is widely expected to announce a rate hike. Markets will also be looking for clues on the central bank’s rate hike trajectory this year.

The dollar index, which tracks the greenback against a basket of currencies, was supported ahead of the conclusion of the Fed’s meeting at 93.826. The People’s Bank of China set the Yuan reference rate at 6.4156 vs previous day’s fix of 6.4121. 

Oil prices fell on Wednesday, pulled down by rising supplies in the United States and expectations that voluntary production cuts led by producer cartel OPEC could be loosened. Brent crude futures were at $75.49 per barrel, down 39 cents, or 0.5 percent, from the last close. U.S. West Texas Intermediate (WTI) crude futures were at $65.92 a barrel, down 44 cents, or 0.7 percent from their last settlement.

Source : Reuters

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