Asia Pacific Market Open – Dow Jones, US China Trade War, AUD/USD, ASX 200
- US stocks gapped higher but the revival of US China trade war fears sent the S&P 500[1] lower
- The US Dollar[2] gained as a liquid safe haven while sentiment-linked crude oil[3] prices declined
- Dow Jones[4] fell but daily chart warns of a reversal. Asia shares may echo Wall Street losses
See our study on the history of trade wars[5] to learn how it might influence financial markets!
US stock markets happily followed European indexes higher at open. The Dow Jones then entered consolidation mode until it not only pared gains, but then also tumbled as much as 2.6%. The revival of trade war fears seemed to be the culprit. Reports that the US was planning the next Chinese tariff wave[6] should talks between Presidents Donald Trump and Xi Jinping fail in November aligned with the selloff.
Chart created in TradingView
In general, market mood deteriorated during the latter half of the US trading session. The S&P 500 and NASDAQ[7] Composite declined about 0.66% and 1.63% respectively. This allowed the US Dollar to benefit given its status as a highly liquid safe haven. Both the pro-risk Australian and New Zealand Dollars thus trimmed their progress made when risk appetite firmed in Asia Pacific trade[8].
Meanwhile the anti-risk Japanese Yen[9] held on to most of its losses and was left little changed against its major counterparts by
