Asia Pacific Market Open – Trade War Fears, Apple Earnings, AUD/USD, US Dollar
- S&P 500[1], Doe Jones Industrial begin November on strong footing as trade war fears ebbed
- Australian and New Zealand Dollars soared, having best performance in years as USD[2] fell
- Weak Apple earnings may limit scope for Asia follow through, AUD/USD[3] still in downtrend
See our study on the history of trade wars[4] to learn how it might influence financial markets!
After a very pessimistic month, most global benchmark stock indexes began the first day of November on a strong footing. Optimism began in Asia Pacific trade and picked up pace during the US trading session. Both the S&P 500 and Dow Jones[5] Industrial continued outperforming as anticipated[6]. The cause for the improvement in market mood seems to be a reduction in trade war fears.
Since the beginning of the week, US President Donald Trump has been hinting that his summit with Chinese President Xi Jinping later this month will go well[7]. Today, he spoke with him on trade and noted that discussions are going along ‘nicely’. If this ends up being the case, perhaps the markets are betting that the US won’t increase the current 10% levy on roughly $200b in Chinese imports to 25% come 2019.
With that in mind, the ‘risk on’ trading dynamic echoed nicely in foreign exchange markets. The relatively high-yielding Australian and New Zealand Dollars generously outperformed against their major counterparts. AUD/USD had its best gain in a single day since March 2017 while
