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Asian Markets Gain Ahead of U.S. Nonfarm Payrolls Data

By Ritu,

Capital Sands

 

Asian markets gained in morning trade on Friday ahead of the release of U.S. nonfarm payrolls data for November due later in the day stateside.

China’s Shanghai Composite was little changed by 10:35 PM ET (02:35 GMT), while the Shenzhen Component inched up 0.2%.

Japan’s Nikkei 225 rose 0.3% after the country’s Prime Minister Shinzo Abe announced on Thursday evening stimulus measures to support growth

The total stimulus package amounts to around 26 trillion yen ($239 billion) spread over the coming years.

The stimulus are expected to boost growth in Japan by about 1.4%, according to a government document.

“We shouldn’t miss this chance, this is exactly when we should accelerate Abenomics and overcome our challenges,” Abe said.

The stimulus came after the Hong Kong government also announced further stimulus measures worth around HK$4 billion ($511 million) earlier this week, as authorities hope to shore up businesses suffering from months of civil unrest.

Hong Kong’s Hang Seng Index last traded at 26,386.75, up 0.7%.

On the Sino-U.S. trade front, the Wall Street Journal reported that the Washington and Beijing disagree on the size of agriculture purchases.

Citing people familiar with the discussions, the Journal said U.S. President Donald Trump wants China to buy $40 billion to $50 billion of farm goods a year, which is significantly higher than the $8.6 billion China bought last year.

South Korea’s KOSPI traded 0.9% higher.

Down under, Australia’s ASX 200 gained 0.3%.

Looking ahead, traders now await the U.S. governments monthly nonfarm payrollsreport, which is expected later in the day.

 

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Gold Prices Up; Trade Deal Might Come After 2020 Election

By Ritu,

Capital Sands

 

Gold prices were supported by a fresh round of uncertainty of the US-China trade deal on Wednesday morning in Asia. The precious metal still hovered near a three-week high above $1,480.

Gold Futures contracts were up 0.06% to trade at $1,485.35 by 11:10 PM ET.

US President Donald Trump suggested that the long-awaited trade deal might have to wait until the 202 election, contrary to what his senior advisor Kellyanne Conway just said this week that the deal could come by the end of the year.

“In some ways, I like the idea of waiting until after the election for the China deal. But they want to make a deal now, and we’ll see whether or not the deal’s going to be right; it’s got to be right,” Trump said at the NATO event in London.

The mixed signals from the White House stirred uncertainty of the global economic prospects, supporting gold that is widely seen as a safe-haven asset.

US Commerce Secretary Wilbur Ross also said if no substantial progress was made soon, another round of duties on Chinese imports including cell phones, laptops and toys would take effect on Dec. 15.

 

 

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Gold trades marginally lower, awaiting trade talk cues

By Ritu,

Capital Sands

 

Gold traded marginally lower on Tuesday morning in Asia, hovering around the $1,468 range as the U.S. and China are still in talks for ‘deal or no deal.’

Gold Futures contracts traded at $1,467.95 by 10:00 PM ET, down 0.09%.

Talks of a possible “phase one” deal between the world’s two largest economies dominated the market this morning, weighing on the precious metal that is seen as a safe-haven asset.

The trade deal was still possible by the end of the year and the first phase of the agreement was being put to paper, according to Kellyanne Conway, a senior adviser to U.S. President Donald Trump.

“There’s a better than 50-50 chance we will get a ‘phase one, skinny’ deal, largely because both presidents, Trump and Xi, need this for domestic political reasons,” Stephen Roach, a senior lecturer at Yale University’s Jackson Institute for Global Affairs, told CNBC.

Gold prices edged up earlier this morning on the overnight news that U.S. President Donald Trump renewed steel and aluminum tariffs on Brazil and Argentina. The move reignited fear of global trade disputes and hampered risk appetite.

The prospects of a trade deal remain unclear as well. Trump said on Monday that the signing last week of two pieces of legislation in the US that support protesters in Hong Kong would not make negotiations easier, but that China still wants a deal.

 

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Oil jumps on Chinese factory growth, hopes for deeper OPEC cuts

By Ritu,

Capital Sands

 

Oil prices rose more than 1% on Monday as signs of rising manufacturing activity in China pointed to increasing fuel demand and hints that OPEC may deepen output cuts at its meeting this week indicated supply may tighten next year.

Brent crude futures rose 74 cents, or 1.2%, to $61.23 a barrel by 0157 GMT. West Texas Intermediate (WTI) futures rose $86 or 1.6%, to $56.03 a barrel, having risen by more than $1 earlier.

On Friday, WTI futures settled 5.1% lower amid reduced volumes because of last week’s Thanksgiving Day holiday while Brent plunged 4.4%. Prices fell on concerns that talks to end the trade war between the United States and China, the world’s two biggest oil users, would be disrupted by U.S. support for protesters in Hong Kong.

But oil rose on Monday after factory activity in November in China, the world’s biggest oil importer, increased for the first time in seven months because of rising domestic demand amid government stimulus measures.

“At the open prices remain supported by the surprising resilient China factory activity with the forward-looking PMI’s beating expectations,” said Stephen Innes, chief Asia market strategist at AxiTrader.

Prices were also supported after Iraq’s oil minister said on Sunday that OPEC and allied producers will consider deepening their existing oil output cuts by about 400,000 barrels per day (bpd) to 1.6 million bpd.

The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, known as OPEC+, are expected to at least extend existing output cuts to June 2020 when they meet this week.

The OPEC+ group has coordinated output for three years to balance the market and support prices. Their current deal to cut supply by 1.2 million bpd that started from January expires at the end of March 2020.

OPEC’s ministers will meet in Vienna on Dec. 5 and the wider OPEC+ group will meet on Dec. 6 to make a decision on the current agreement.

“All eyes are on OPEC this week,”

Oil rose in November partly on expectations of the United States and China reaching an initial deal trade deal by the end of the year that would help restore global economic growth and future crude demand

 

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USD/CHF Technical Analysis: Sellers focused on spinning top near multi-week high

By Ritu,

Capital Sands

  • USD/CHF declines after registering a bearish candlestick formation the previous day.
  • Buyers look for sustained trading beyond 1.0000 psychological magnet.
  • 200-day SMA can please sellers during further downside.

USD/CHF drops to 0.9985 during the early trading session on Friday. That said, the pair formed a bearish “Spinning Top” candlestick formation while taking a U-turn from 1.0000 round-figure.

Considering the pair’s repeated failures to provide a sustained run-up beyond 1.0000, coupled with bearish candlestick pattern, prices are likely declining towards the 200-day Simple Moving Average (SMA) level of 0.9950. Though, late-October high close to 0.9970 can offer an intermediate halt during the declines.

In a case where bears dominate below 200-day SMA, mid-November tops close to 0.9910 can return to the chart.

Alternatively, the pair’s successful rise beyond 1.0000 could target October high around 1.0030 whereas late-May peak close of 1.0100 might lure bulls afterward.

 

 

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Yen gains Yuan falls as Hong Kong tensions muddy trade progress

By Ritu,

Capital Sands

 

The safe-haven yen rose against the dollar after U.S. President Donald Trump signed into law support for anti-government protesters in Hong Kong, which could complicate efforts to end the U.S.-China trade war.

That caused the yuan to fall in offshore trade on mounting worries that months of often violent protest against Chinese rule of the former British colony potentially will worsen already fractious relations between Washington and Beijing.

The Swiss franc and gold also rose on Thursday as investors sought other safe harbours due to concerns about a potential increase in geopolitical risk.

In response to the U.S. move, China’s foreign ministry said it resolutely opposed the law and threatened to take firm counter-measures, complicating efforts to scale back a 16-month long trade war between the world’s two-largest economies.

The yen rose around 0.2% to 109.39 versus the dollar on Thursday in Asia, rebounding from a six-month low reached Wednesday after U.S. economic growth was revised up in the third quarter.

In the offshore market, the yuan fell 0.16% to 7.0255 per dollar. In the onshore market, the yuan was little changed at 7.0287 versus the greenback.

China’s foreign ministry also said on Thursday that U.S. attempts to interfere in Hong Kong are “doomed to fail.”

Washington’s rebuke also comes as U.S. and Chinese negotiators are trying to reach an agreement to de-escalate a trade war, which would remove a huge headwind from the global economic outlook.

The United States and China have imposed tariffs on each other’s goods in a prolonged dispute over Chinese trade practices that the U.S. government says is unfair.

Investor uncertainty benefited the Swiss franc, which pulled back from a two-month low to trade at 0.99875 against the greenback.

Gold, another safe haven bought in times of uncertainty, rose 0.22% to $1,457.36 per ounce.

The rise in safe havens undermined the dollar, which came into Asian trade on a high after revised data showed U.S. economic growth picked up slightly in the third quarter.

Separate data showed new orders for key U.S.-made capital goods increased by the most in nine months in October and shipments rebounded.

 

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Asian shares climb on Trump trade deal comments

By Ritu,

Capital Sands

 

Asian shares rose on Wednesday as upbeat signals from Sino-U.S. trade talks fanned hopes of an easing of tariff hostilities, while expectations the Federal Reserve will keep interest rates low supported sentiment.

The positive mood pushed Wall Street indexes to fresh record closing highs on Tuesday and stoked confidence in Asia with MSCI’s broadest index of Asia-Pacific shares outside Japan up 0.19%. Australian shares  added 0.65% and Japan’s Nikkei rose 0.36%.

Chinese blue-chip shares), in contrast, dropped 0.39% after the data showed profits at China’s industrial firms declined in annual terms for the third consecutive month in October, tracking sustained drops in producer prices and exports and underscoring slowing momentum in the world’s second-largest economy.

U.S. President Donald Trump said on Tuesday the United States and China are close to agreement on the first phase of a trade deal after top negotiators from the two countries spoke by telephone and agreed to keep working on remaining issues.

But while Trump said Washington was in the “final throes” of work on a trade deal with Beijing, he also underscored U.S. support for protesters in Hong Kong, seen as a sore point for Beijing.

Trump’s comments came alongside softer-than-expected economic data from the United States, which showed a fourth straight monthly contraction in consumer confidence and an unexpected drop in new home sales in October.

On Wednesday, the rally in U.S. Treasuries moderated across the curve, with benchmark 10-year notes yielding 1.7483%, up from their U.S. close of 1.74% on Tuesday.

The two-year yield, watched as a guide to market expectations of Fed policy, rose to 1.5959% compared with a U.S. close of 1.586%.

In currency markets, the dollar strengthened 0.06% against the yen to 109.10 <jpy=>and the euro was slightly weaker, buying $1.1017.</jpy=>

The dollar index, which tracks the greenback against a basket of six major rivals, was up 0.06% at 98.313.

Oil prices retreated after rising Tuesday on reassuring trade headlines. U.S. West Texas Intermediate crude was down 0.34% at $58.21 per barrel.

Global benchmark Brent crude lost 0.33% to $64.06 per barrel.

Gold was lower, changing hands at $1,459.43 per ounce on the spot market, down 0.12%.

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Dollar hits 1-week high on yen as U.S.-China trade deal hopes rise

By Ritu,

Capital Sands

 

The dollar held an upper hand against the yen on Tuesday as optimism on a trade deal between the United States and China dented the allure of the safe-haven unit while the British pound was supported by hopes of an end to a hung parliament.

China’s Global Times, a tabloid run by the ruling Communist Party’s official People’s Daily, said on Monday on its Twitter feed the two countries are very close to a “phase one” trade deal, discounting “negative” media reports. report raised optimism the deal and lifted the dollar against the yen to as high as 109.02 yen JPY= , a one-week high, by early Asian trade on Tuesday.

“China appears positive to the deal. The dollar could rise further to around 109.50 if U.S. officials will visit China,” said Yukio Ishizuki, senior strategist at Daiwa Securities.

Last week, the Chinese government invited United States Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to Beijing for face-to-face talks, the Wall Street Journal reported.

“Trading in the next couple of weeks will be all about the U.S.-China deal,” said Daiwa’s Ishizuki.

The euro softened to $1.1013 EUR= , near one-week low of $1.10035 touched on Monday.

Sterling traded at $1.2900 GBP=D4 , supported by hopes that the ruling Conservatives could win a majority in the Dec. 12 election to end a hung parliament.

Against the euro, the British unit stood at 85.365 pence per euro, near six-month high of 85.22 touched Monday last week.

The Australian dollar fetched $0.6776 AUD=D4 , having touched a one-month low of $0.6768 overnight.

Despite rising hopes of U.S.-China trade deal, the Aussie has been pressured by a run of disappointing local economic data that has led investors to narrow the odds on another rate cut from the Reserve Bank of Australia (RBA).

Overall, currency trading is slowing down ahead of U.S.

 

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Asia shares regain footing as mood swings on trade

By Ritu,

Capital Sands

 

Asian shares made guarded gains on Monday as investors dared to hope for some progress in the endless Sino-U.S. trade dispute, while the outperformance of recent U.S. economic data gave the dollar a leg up on its peers.

MSCI’s broadest index of Asia-Pacific shares outside Japan bounced 0.8%, after losing 0.4% last week.

Japan’s Nikkei .N225 firmed 0.9%, while Australian stocks .AXJO rose 0.5% and Shanghai blue chips .CSI300 0.4%.

E-Mini futures for the S&P 500 ESc1 added 0.3%, while EUROSTOXX 50 futures STXEc1 gained 0.6%.

On Saturday, U.S. national security adviser Robert O’Brien said an initial trade agreement with China is still possible by the end of the year, though he warned Washington would not turn a blind eye to what happens in Hong Kong. comments add to worries that a Chinese crackdown on anti-government protests in Hong Kong could further complicate the talks.

Over the weekend, pro-democracy candidates in Hong Kong romped to a landslide and symbolic majority in district council elections in the embattled city. are showing some signs of tiring of the steady drip feed of upbeat comments from U.S. officials and no signs of a final agreement looking likely,” said Robert Rennie, head of financial market strategy at Westpac.

“Key for markets will thus be whether the Dec. 15 tariffs covering approximately $156 billion of largely technology imports are postponed and whether a deal can be signed ahead of that date, with press suggesting that these tariffs will be delayed to give negotiators more time.”

Reuters reported an ambitious “phase two” trade deal was also looking less likely, according to U.S. and Beijing officials, lawmakers and trade experts. DIRTY’

In currency markets, the dollar had rallied on Friday when U.S. manufacturing surveys beat forecasts, just as European Union numbers disappointed. economic data outperformed, highlighting again the resilience of the economy and that while global growth has slowed, it remains the least dirty t-shirt in the laundry basket,” said Tapas Strickland, a director of economics and markets at National Australia Bank.

“For the EU data, the important takeaway was the ongoing decline in the manufacturing sector is now spreading to the larger services sector, a worrying sign for the global economy.”

European Central Bank President Christine Lagarde on Friday called on euro zone governments to strengthen domestic demand after a global trade war brought a decade of export-driven growth to an abrupt end. Reserve Chair Jerome Powell speaks later on Monday and is expected to underline the steady outlook for rates given the better economic figures.

The euro was off at $1.1023 EUR= on Monday, having breached chart support at $1.1040, while the dollar edged up to 108.75 yen JPY= .

The dollar was steady on a basket of currencies at 98.243 .DXY , after gaining 0.3% last week.

 

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Dollar slips as Chinese comments marginally boost risk appetite

By Ritu,

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The dollar was marginally down on Friday and risk appetite boosted by statements from China on the need to find a solution to the tit-for-tat tariff war with the United States, raising hopes that a “phase one” deal could be reached.

Chinese President Xi Jinping said Beijing wants to work out a deal with Washington and has been trying to avoid a trade war – but is not afraid to retaliate when necessary. senior Chinese diplomat urged the United States to compromise in order to develop stable relations between the countries. after a week of mixed signals over the likelihood of a preliminary trade deal, the developments did little to move markets. Currencies continued to trade in tight ranges.

Against a basket of currencies, .DXY , the dollar was down less than 0.1%, breaking its three-day streak of gains and heading for its smallest weekly change since the start of August this year.

The Swiss franc was down 0.2% against both the dollar CHF=EBS and the euro EURCHF=EBS , suggesting market optimism as the Swiss franc is perceived as a safe-haven currency.

But the Japanese yen – also seen as a safe haven – was flat against the dollar JPY=EBS .

The trade-exposed New Zealand dollar and Swedish crown were both up 0.2% against the U.S. dollar NZD=D3 .

MUFG currency analyst Lee Hardman wrote in a note that low volatility and tight trading ranges are currently the key characteristics of the FX market.

German third quarter GDP data released earlier this morning held no surprises, showing that exports, state spending and consumers helped the German economy avoid a recession. to now, the slowdown in Germany has been concentrated in the manufacturing sector,” Daria Parkhomenko, forex strategy associate at RBC Capital Markets, wrote in a note to clients.

“Unless global uncertainties are lifted, which are weighing down on the manufacturing sector, it is only a question of when, not if, the weakness in manufacturing spreads to the rest of the economy,” she wrote.

The euro was slightly up against the weaker dollar EUR=EBS .

Flash eurozone PMI data were due at 0900 GMT.