By Nicholas Cork
Global markets have breathed a sigh of relief late yesterday after Trump announced a delay to a new round of tariffs via twitter citing “substantial progress.” Further confidence was gained after Trump later said at the White House “I told you last night — there was a lovely dinner — but I told you how well we did with our trade talks in China and it looks like they’ll be coming back quickly again, and we’re going to have another summit, we’re going to have a signing summit, which is even better, so hopefully we can get that completed, but we’re getting very, very close.”
Biggest relief was seen in Chinese equities which rose over 5% which was a large move even in this index which often sees large swings. The AUD and NZD both made gains with the AUD heading back towards 72 cents, over a full cent higher than coal ban inspired sell-off. AUD crosses are generally higher with AUDJPY looking like breaching 80.00 for the first time this year.
Notably, the CAD, however, could not share the relief as it fell alongside the oil price. Further relief is being fuelled by the impending summit in Vietnam this week where Trump told reporters yesterday that he and Kim would have “a very tremendous summit, we want denuclearization, and I think he’ll have a country that will set a lot of records for speed in terms of an economy.”
In Brexit news, the GBP has remained elevated after the EU has more or less suggested an extension to the Mar 29 deadline, with EU president Tusk saying “I believe in the situation we are in, an extension would be a rational solution but Prime Minister May still believes she’s able to avoid this scenario.” Even opposition leader Corbyn appears to have changed his stance, saying Labour would support a second referendum to stop what he called “a damaging Tory Brexit.”
Today AUD may just continue to make hay whilst the sun is shining, resistance is at 72 cents initially and major resistance at the 200 day moving average which comes in today at 0.7260. 71 cents supports for now.
Shanghai Stock Market (REUTERS)
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