Global Market Optimistic Over Trump’s Mixed Signals

HONG KONG, H.K. – Previously, the global stock market got the burnt from the statement of US President Trump saying that the trade negotiations with China will more likely pursue until after the 2020 elections, but it seems that the President has been talking about the entire trade deal, and not phase one which was already announced that it’s getting close to a final.

When the US President said the other day that the trade talks have no deadline, he was not referring to the interim trade deal. And with that, it has flickered hopes of the global investors and stocks to rise on Thursday.

With the renewed hopes on a trade deal, investors have piled back overnight, bringing Wall Street shares reversed from its previous three-day sell-off. The S&P 500 index marked a 0.63% increase, while the Nasdaq and Dow Jones indexes rose by 0.54% and 0.53%, respectively.

Asian stocks also wasted no time in climbing with the new optimism on trade, with the Nikkei 225 index in Japan going higher towards a 0.70% increase. The Kospi index also recorded a 0.76% gain. The same goes for the major indexes in China with the Shanghai Composite index and the CSI 300 index going up by 0.35%. The Hang Seng index of China also climbed by 0.65% on Thursday.

The market had a collective sigh of relief with the new optimism on share prices, and analysts expect gains going forward unless a new headline bomb on trade deal comes out.

In the currencies front, the US dollar has also reclaimed some of its losses the previous day, especially against the safe-haven currencies such as CHF and JPY. The USD/JPY pair has traded with a 0.20% increase at 108.50, while the USD/CHF pair gained by around 0.20% at 0.9880.

However, the British Pound was the real start overnight as it broke out from its two-month range of 1.2800/1.3000, climbing around 0.90% towards 1.3100. The positive rally for the currency was mostly boosted by the increased probability that the Conservatives will take the majority of votes at the UK election, sparking certainty that the Brexit is a go.

On the other hand, the dollar was a bit weaker against regional currencies in Asia as market players seized the bullish mode for phase one of the trade deal, although the market rally in Asia will continue to be cautious and prefers to get more concrete progress on the trade agreement.

Gold has also traded positively overnight, going as high as $1484.00 per ounce, but the positive headlines on trade saw it decline by around 0.16% towards $1474.75.