Asian stocks pare gains amid receding trade optimism
|- US-China trade hawks re-check concerns as China stays firm on its demand.
- NZ employment data keeps RBNZ’s rate cut on the cards while BOJ minutes keep favoring easy money
- Fedspeak refrains from backing the recent optimism.
Having surged to multi-month high during the previous day, Asian shares seem to doubt the rally on Wednesday amid mixed headlines concerning the US-China trade optimism. Adding to the downside pressure could be the recent calls that the US Federal Reserve (Fed) could rethink its future rate cuts amid latest positive data.
During the early-day releases, global media unearthed doubts over the successful “Phase One” deal between the United States (US) and China as the dragon nation stands firm in its demand to revoke some/all of the Trump administration’s tariffs. The same gained traction after China’s Vice Premier Liu He reignited the fears of the US-China confrontation over the Hong Kong issue.
However, downbeat employment statistics form New Zealand, sustained support for easy money policy by the Bank of Japan (BOJ) minutes and an absence of upbeat tone from the Fedspeak seem to limit the bears.
As a result, MSCI’s index of Asia Pacific shares outside Japan marks 0.2% losses while Japan’s NIKKEI stays mostly unchanged at 23,270. Further, China’s indices flash red signals while Indonesia’s IDX Composite losses nearly 0.5% and the Philippines’’ PSEi marks -1.29% by the press time. Shares in Australia and India, as indicated by ASX 200 and BSE SENSEX respectively, please sellers with -0.26% and -0.43% by the time of writing.
Given the renewed fears of a trade war between the US and China, markets will keep close watch over the trade headlines. On the other hand, Fedspeak will also be the key amid recently increasing hawkish calls concerning the Fed.
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