KL Trader Investment Research Articles

Author: kltrader   |   Latest post: Tue, 15 Oct 2019, 10:21 AM


US-China Trade Tensions Return

Author:   |    Publish date:

Last Thursday, US president Donald Trump said that the meeting with China president Xi Jinping will not happen before the 1 March deadline. US stocks were largely unaffected by this news, posting a 0.07% gain last Friday (8 Feb) to end the week higher, though Bloomberg noted in an article (11 Feb) that Asian stocks are set to dip as China traders return from the holidays.

No Meeting by 1 March Deadline

US president Donald Trump ruled out a meeting with Xi Jinping, China’s president, before a 1 March deadline for Washington to strike a trade deal with Beijing. The date signifies the end of a 90-day truce between US and China, after which tariffs on about USD200bil worth of Chinese exports to the US will increase from 10% to 25%.

According to an article on Financial Times (8 Feb), the US president answered “no” when asked by reporters if he would be meeting his Chinese counterpart by the deadline. Before Trump’s remarks, economic adviser Larry Kudlow said on Thursday that Washington and Beijing still had a “pretty sizeable distance to go here”.

Further to this, China said vice premier Liu He will join US trade representative Robert Lighthizer and treasury secretary Steven Mnuchin in high-level trade talks between the two countries this week (Bloomberg, 11 Feb). China’s Commerce Ministry said in a statement last Saturday that the US team will arrive in Beijing today (Monday, 11 Feb) to discuss issues of common concerns, but gave no further details on the talks scheduled for 14-15 February.

Recent Index Movements

The S&P 500 Index didn’t react much do the news, rebounding from a dip earlier in the day on Friday (8 Feb) and from the 1% drop on Thursday (7 Feb) to close at 2,707.88 points (+0.07%) on Friday, up 0.05% week-on-week (w-o-w).

Following the Hong Kong public holidays from 4 (afternoon session) to 7 February, the Hang Seng Index (HSI) fell a slight 0.16% last Friday (8 Feb) to close at 27,946.32 points last Friday, up a slight 0.06% w-o-w, while the iShares China A50 Index ETF (China A50) declined a larger 1.1% to HKD12.66 last Friday, down 1.6% w-o-w.

Meanwhile, local benchmark index FBM KLCI closed down a moderate 0.4% to 1,686.52 points last Friday, shifting only a slight 0.18% month-to-date.

Bloomberg noted in an article (11 Feb) that stocks in Asia are set to dip as China traders return from the Chinese New Year holidays, as doubt on the possibility for progress on the trade deal crept back into markets.

Source: Macquarie Research - 11 Feb 2019

Share this

  Be the first to like this.


408  271  534  763 

Top 10 Active Counters
 KNM 0.445+0.05 
 SAPNRG 0.27+0.005 
 ARMADA 0.42+0.005 
 KNM-WB 0.185+0.06 
 NETX 0.02-0.005 
 PUC 0.055-0.005 
 MNC 0.02-0.01 
 HSI-C7F 0.3150.00 
 ISTONE 0.2250.00 
 GPACKET-WB 0.3150.00 
Partners & Brokers