The markets seemed to have taken another escalation in trade war rather well. After some knee-jerk reactions, Dollar and Yen are back under selling pressure. Though, Sterling is the second weakest in between them as recent rally, in particular against Euro, lost steam. It’s possibly the time for Euro to pick up from speed. Though for now, the common currency is out-performed by commodity currencies, with Australian Dollar leading the way up.
The stock markets are also cool. At the time of writing, DTSE is up 0.04%, DAX up 0.18% and CAC up 0.18%. Earlier in Asia, Nikkei closed up 1.41%, Hong Kong HSI up 0.56% and Singapore Strait Times was just down -0.07%. Most notably, China Shanghai SSE reversed earlier loss and closed up 1.82% at 2699.95, just shy of 2700 handle. The strong close is indeed suggesting short term bottoming,just ahead of 2638.30 key support (2016 low). But question remains on how strong the rebound could be.
USD/CNH (offshore Yuan) is also steady. For now, we’re not anticipating sustained break of 6.8959 minor resistance. Another fall to 6.7776 is mildly in favor as the corrective pattern from 6.9586 extends.