April 13, 2018
Asian equities rise as trade and geopolitical concerns go down
Asian equities traded mostly higher on Friday, April 13, and investor confidence improved amid a slowdown in recent trade and geopolitical tensions.
In Japan, financial and material stocks rose. Major exporters, including car and technology manufacturers, also improved amid the rise of the dollar against the yen. South Korea's Kospi is helped by a strong rise in the technology sector. Positive sentiment was also observed in Australia, with health care and materials being among the best performing sectors.
China's exports in March fell by 2.7 percent, below expectations. Imports in dollars rose by 14.4 percent, exceeding the projected 10 percent increase.
Trump said he is considering rejoining the Asia-Pacific trade pact again, despite keeping his campaign promise to withdraw from it shortly after taking office. He also expressed confidence that the United States is moving toward a resolution of a trade dispute that began with China, which included a threat last week to impose $100 billion in additional tariffs on Chinese products.
American markets rose sharply on Thursday after President Donald Trump clarified his position on a possible missile attack in Syria. The banks' shares led the profits, with J.P. Morgan Chase, Citigroup and Goldman Sachs up more than 2 percent. Profits are expected to grow 24 percent in the financial sector.
The Russians were subjected to harsh threats after Trump's angry tweets about the missile attacks in Syria. With the United States showing no signs of regressing, Vladimir Putin seems to be doing so. Trump tweets with this message: `I never said when an attack on Syria would take place. It may be too soon or not too soon. In any case, the United States, under my administration, has done a great job in ridding the region of ISIS. We must thank America'.
Dollar rises broadly. The Dollar rises against most of its major currency pairs on Friday, as risk appetite increased in equities and as a result, U.S. bond yields rose sharply.
Oil prices fell on Friday, but have now reached their highest weekly gains since July, after a peak of more than three years, reached earlier in the week, due to tensions over Syria and falling global oil inventories.
Gold prices rose in Friday's Asian session after registering its largest percentage decline in more than two weeks in the previous session. He was on the verge of a small gain, for the second week in a row, amidst tensions in Syria and the trade dispute between the United States and China.
European markets are expected to open Friday's session higher.
Trump once again influences the market
The world's leading stock exchange revaluated by around one percentage point on Thursday 12 April, showing how volatile US equities are.
Trump is once again defusing tension with Russia. Once again we see, with the help of Tweet, the way Donald Trump does things. Wednesday was a very busy day with everything the President of the United States published and the point is that there is a certain modus operandi.
At the moment there is a great deal of threat and a great deal of danger, in the short term, following the comments. However, in the end it seems to make a break by reaching out to force negotiations.
Reading of the minutes of the European Central Bank. They have shown that there is concern about the level of the euro, although they say that in the past an increase in the price of the single currency did not affect demand. However, it would damage the inflation outlook.
European stock markets where holding back on Thursday 12 April, with the euro at $1.23 and the Brent at around $72.
The market was badly damaged by the fear of trade warfare
Some relief was beginning to be felt because the tone of the U.S.-China threats had subsided.
The latter country has taken the initiative and begun to open up even more to the market to show itself as the antithesis of Donald Trump, accepting more foreign capital and lowering tariffs, something that could compensate for the damage to trade caused by US isolationism.
However, the real war, the one that makes people suffer, takes centre stage. We have already seen that the situation in Syria has been unstable for too long and there are two clearly distinct sides intervening in the situation, both directly and indirectly.
On the one hand, there is Russia, which is supporting Syria, and which is also supporting Iran, in a place that could help increase pressure on Saudi Arabia, an ally of the United States.
As in Yemen, more is being played than originally thought
The recent chemical attack is what's triggering all the rage. The international community finds this unacceptable.
The United States gave itself 24 hours to decide whether to intervene militarily in Syria and the airlines appear to have been warned not to enter the area in the next 72 hours because something could happen. Russia has raised the tone, several Members are going to meet with Assad, and he has also said that any missile approaching the area in Syria will be shot down and the sites of its launch will be targeted.
The point is that if these missiles are launched from aircraft carriers, cruisers, destroyers, or submarines, it is not known whether these devices would be qualified as targets, so we would be talking about a direct threat to Western units from Russian units, which would be almost a direct conflict.
The market is very frightened about this issue because it is something that nobody likes, especially because of the confrontation between the sides that could end up in something much more powerful.
Geopolitical tensions drive up the price of gold, which is trading at its highest level of the year
Gold prices rose sharply on Wednesday after renewed geopolitical tensions between the U.S. and Russia led the price to hit annual highs.
For the time being, gold has slowed down dryly due to its resistance to annual highs. But it is no less true that overcoming this resistance would leave the door open to the possibility of looking for the resistance zone conferred by the upper part of the bullish channel, now nearing 1,400 dollars.
In any case, what is really important is that, apart from corrections, the increasing minima and maxima are still there.
The energy sector continues to play a leading role
The price of crude oil is slightly below 67 dollars a barrel.
There is also news from OPEC because, after presenting their monthly report, they say they would be willing to take the agreement to reduce production beyond 2019 and even if the surplus of crude oil reserves were to be eliminated.
Therefore, it seems that they still see the remarkable increase in production in the United States as a major enemy, so they are fighting directly against that production.
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