Forex: Dollar Creeps Lower on Cooling Hopes of Delay to Tariffs on China

© Reuters.  © Reuters.

Invesing.com – The U.S. dollar edged lower on Tuesday, as uncertainty over whether the U.S. would delay planned tariffs on imporrts from China continued to weigh on sentiment.

The , which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.17% to 97.48.

Larry Kudlow, President Donald Trump’s top economic advisor, reportedly said he could not confirm the further tariffs on China would be delayed.

That offset positive news on trade amid a Wall Street Journal report suggesting that the U.S. was mulling a delay to imposing tariffs on China.

Without a deal nor a delay to tariffs before the Dec. 15 deadline, the U.S. is slated to impose tariffs on another $ 156 billion on Chinese goods.

These would include cellphones, laptops and tablets made in China, along with toys, office and schools supplies, some clothing, and even frozen Alaskan pollock fillets.

The dollar was also hurt by a rise in both the euro and the pound.

rose 0.22% to $ 1.1086 as economic data, including a in Germany, was not as bad as feared.

With just two days until U.K. voters head to the booths, the continued to rack up gains against the greenback amid expectations that the ruling Conservative party will secure a parliamentary majority.

Firmer also underpinned a bid in sterling.

rose 0.32% to 1.3184.

As a conservative victory is almost fully priced-in, “even a landslide victory might hardly see the pound rise,” said Oliver Allen at Capital Economics.

rose 0.19% to Y108.75 and was flat at C$ 1.3237.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Australia stocks lower at close of trade; S&P/ASX 200 down 0.74%

© Reuters.  Australia stocks lower at close of trade; S&P/ASX 200 down 0.74% © Reuters. Australia stocks lower at close of trade; S&P/ASX 200 down 0.74%

Investing.com – Australia stocks were lower after the close on Thursday, as losses in the , and sectors led shares lower.

At the close in Sydney, the lost 0.74%.

The best performers of the session on the were Monadelphous Group Ltd (ASX:), which rose 3.00% or 0.480 points to trade at 16.500 at the close. Meanwhile, Southern Cross Media Group Ltd (ASX:) added 2.81% or 0.025 points to end at 0.915 and Metcash Ltd (ASX:) was up 2.36% or 0.070 points to 3.040 in late trade.

The worst performers of the session were Polynovo Ltd (ASX:), which fell 6.09% or 0.120 points to trade at 1.850 at the close. Webjet Ltd (ASX:) declined 5.98% or 0.770 points to end at 12.110 and Mineral Resources Ltd (ASX:) was down 5.50% or 0.810 points to 13.920.

Falling stocks outnumbered advancing ones on the Sydney Stock Exchange by 676 to 443 and 303 ended unchanged.

The , which measures the implied volatility of S&P/ASX 200 options, was up 3.61% to 11.627.

Gold Futures for December delivery was down 0.29% or 4.25 to $ 1469.95 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in January fell 0.25% or 0.14 to hit $ 56.87 a barrel, while the January Brent oil contract fell 0.27% or 0.17 to trade at $ 62.23 a barrel.

AUD/USD was down 0.04% to 0.6800, while AUD/JPY fell 0.05% to 73.83.

The US Dollar Index Futures was down 0.01% at 97.800.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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European major indices close the day mostly lower

Yields are mixed 

The major European stock indices are closing the day mostly lower. The provisional closes are showing:

  • German DAX, -0.32%
  • France’s CAC, -0.11%
  • UK’s FTSE 100, -0.67%
  • Spain’s Ibex, -0.17%
  • Italy’s FTSE MIB, -0.41%

A look at the benchmark 10 year yields is showing a mixed picture with Germany France and UK yields moving lower, while the more risky Spain Italy and Portugal moving higher.

Yields are mixed 

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China Factories Are Exporting Lower Prices Around the World

(Bloomberg) — Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Apple Podcast, Spotify or Pocket Cast.

Chinese factories are again threatening to drag down prices around the world as the cost of their goods decline by the most since 2016.

In a fresh challenge to the ability of global central banks to revive inflation, China’s slowest growth in almost three decades and cheaper energy costs have left manufacturing prices declining since July.

While cheaper goods may be a boon to foreign consumers as Christmas nears, the overall effect is a potential spiral of falling prices worldwide as companies everywhere are forced to compete with Chinese rivals to protect profits. That would add further tension to the U.S.-China trade war.

“Inflation is increasingly driven by global factors, and in particular, by waves of disinflation emanating from China,” according to Stephen Jen and Joana Freire at Eurizon SLJ Capital. “This is related to China exporting its overhang of capacity” which has been exposed by weak domestic demand, trade tensions with the U.S., and lack of economic stimulus.

They expect the recent worsening of the producer price index to weigh on inflation rates in the U.S. and Europe, similar to what happened in 2014-16. Producer prices in Germany, Japan, South Korea and the U.S. are already negative.

Data released on Saturday underscored the problem, with Chinese producer prices dropping for a fourth month in October. Input costs and energy prices have fallen since June, reducing costs for producers. However, those savings haven’t boost companies’ margins as demand isn’t strong and there’s plenty of excess capacity, so manufacturers have also cut asking prices.

What Bloomberg’s Economists Say

“Deepening factory deflation highlights sluggish demand, and depresses profits for industrial firms — limiting capacity to hire workers and invest in facilities.”

Weakening commodity prices are still the main cause for the deflation, and this is weighing on prices of related downstream industries, such as chemical materials and chemical fabrics.

David Qu, Economist

See here for the full note

A key problem is that while prices deflate, loans don’t, making it harder still for China’s indebted industrial sector to make ends meet. Chinese private companies are already defaulting on their bonds at twice the rate this year compared with 2018, and the government is worried about the health of the banking sector.

“The U.S.-China trade war is paralyzing global capex spending and delivering a massive deflationary shock,” according to Chua Hak Bin at Maybank Kim Eng Research Pte. in Singapore.

U.S. tariffs are diverting China’s excess capacity and supply to third countries, and more companies and nations are likely to feel the deflationary pressures, according to Chua.

The deflation risk reflects China’s heftier role in the world economy and how for many industries it is a price setter. It made up 12% of total global trade in 2018, the largest single country. Chinese price shocks accounted for about 6% of average inflation globally, according to a 2016 analysis by Bundesbank economists.

Similar to what happened in 2014-2016, a flow of cheaper goods from China will make it harder for central banks elsewhere to generate sustained inflation. Consumer prices in Japan, Germany and the U.S. are already below their inflation targets of around 2% a year, and further declines in the price of imports and manufactures will only make it harder to reach those goals.

China is the biggest source of imports for the U.S. and Japan, and the second-biggest for Germany, after the Netherlands.

The effect of the slide in the price of exported Chinese goods is already appearing in the data of some of those trading partners, with the prices of Chinese machinery, metals, cloth, and chemicals imported by Japan all dropping, and the price of U.S. imports also in decline. Germany and South Korea don’t provide a breakdown on the price of imports from China.

In addition to falling PPI, discounts by Chinese companies to compensate for tariffs may be having an effect on the price of goods sent to the U.S., and some of the decline in export prices is likely due to the yuan weakening against the dollar, making Chinese goods cheaper for companies in many countries.

Still, China’s producer deflation is nowhere near as bad as the low of -5.9% seen in 2015, and much of the current drop is due to cheaper energy and commodity prices, according to Michael Shaoul of Marketfield Asset Management. If energy prices stay stable, China’s factory prices may become neutral, he said.

Economists expect producer prices to bottom out in the fourth quarter before recovering slightly.

As for consumer prices in China, the overall measure is actually rising as soaring pork prices push up foods costs. That’s caused global bacon prices to increase and is pushing up the cost of other meats.

“China’s PPI deflation is a result of both weak commodity prices and weak domestic demand,” according to Chi Lo, Greater China economist at BNP Paribas (PA:) Asset Management. “The China factor is disinflationary at this point but not deflationary.”

(Updates with comment from Bloomberg economist.)

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Hong Kong’s Hang Seng Index opens lower, down more than 1.1%. Violence in HK intensifying.

Weekend protest in HK is deteriorating into violence Monday, with at least two protesters shot by police.

Stocks on mainland China are also lower at the opening, around 0.5% lower for the CSI300 and Shanghai Composite 

‘Overnight’ trade on US stocks is showing weaker also, indices down a few points. 

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Forex – Dollar Lower as Speculation Swirls Pre-Trade Talks

© Reuters.  © Reuters.

Investing.com — The dollar was lower across the board in early trading Thursday amid a welter of often contradictory reports about the upcoming trade talks between the U.S. and China which resume later in Washington.

While a conclusive de-escalation of the conflict appears out of reach after another batch of company-specific actions by both sides this week, reports have suggested that both sides would accept some narrower kind of agreement in the short term in order to take the heat off their respective economies, both of which appear to have slowed sharply this year under the strain of the dispute.

Bloomberg reported overnight that the White House wanted to revive the idea of a pact on currency management that had been mooted in talks earlier this year, as well as suspending a tariff increase on Chinese imports which is scheduled to come into force later this month.

The New York Times meanwhile reported that the U.S. could also cut some slack to U.S. companies supplying telecoms giant Huawei.

Others gave a gloomier take on the negotiations, with both the South China Morning Post and Fox News saying they could be cut short.

Having digested all the various reports, the {{|Chinese yuan}} and commodity-linked currencies such as the and were all higher against the dollar by early morning in Europe.

By 3:30 AM ET, the , which tracks the greenback against a basket of currencies, was down 0.3% at 98.547. The dollar was also down by around 0.3% against both the mainland and the .

The took advantage of the dollar’s weakness to rise above $ 1.1000 for the first time in a week. By 3.30 AM ET, it was up 0.4% at $ 1.1041. That was despite weaker-than-expected data from France and lower-than-expected from Germany in August.

Even the , which hit a four-month low against the dollar earlier in the week as its troops lined up to invade northern Syria, has staged a brief recovery, rising 0.2% before paring gains to trade at 5.8686 to the dollar.

Elsewhere, the was steady against the dollar but lower against the ahead of last-ditch talks between Prime Minister Boris Johnson and his Irish counterpart Leo Varadkar on resolving the Irish border issues in the Brexit talks.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Sunday evening US equity index futures trade is open, marked lower to begin the week

S&P500 emini trade has begun on Globex 

Down over half a percent 

UST futures little changed.

ES futures likely off on the news from Bloomberg earlier:

That took some points out of AUD/JPY (forex markets were already trading). Since then some of the loss has been recovered.   

S&P500 emini trade has begun on Globex 

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European shares end the day higher, but the week is mostly lower

The UK FTSE is up on the week.

The European shares ending the day higher with the UK FTSE leading the way to the upside.  It rose 1.02% on the day. The German Dax was up 0.75%. France’s CAC and Italy’s FTSE MIB lagged. 

The UK FTSE is up on the week.

For the week, the major indices were mostly lower, however, with the excetption being thie UK FTSE which rose by 1.11%.  Spain’s Ibex was unchanged.

Below is a summary of the week moves (the US markets are obviously stilll open and moving).  The worst performer in Europe was the Portugal PSI20 which fell -1.64%. The German Dax fell -0.70% and France’s CAC fell -0.88%. US shares are also lower for the week with the Nasdaq index and small caps Russell 2000 down the most. 

  The weekly changes of the major EU and NA stock indices

The 

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US stocks poised to tick lower at the day

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Australia stocks lower at close of trade; S&P/ASX 200 down 0.38%

© Reuters.  Australia stocks lower at close of trade; S&P/ASX 200 down 0.38% © Reuters. Australia stocks lower at close of trade; S&P/ASX 200 down 0.38%

Investing.com – Australia stocks were lower after the close on Monday, as losses in the , and sectors led shares lower.

At the close in Sydney, the fell 0.38%.

The best performers of the session on the were Speedcast International Ltd (ASX:), which rose 23.87% or 0.185 points to trade at 0.960 at the close. Meanwhile, Western Areas Ltd (ASX:) added 14.11% or 0.350 points to end at 2.830 and Independence Group NL (ASX:) was up 9.56% or 0.520 points to 5.960 in late trade.

The worst performers of the session were Nearmap Ltd (ASX:), which fell 6.59% or 0.180 points to trade at 2.550 at the close. Incitec Pivot Ltd (ASX:) declined 6.23% or 0.200 points to end at 3.010 and Service Stream Ltd (ASX:) was down 4.18% or 0.120 points to 2.750.

Falling stocks outnumbered advancing ones on the Sydney Stock Exchange by 698 to 552 and 363 ended unchanged.

Shares in Western Areas Ltd (ASX:) rose to 52-week highs; up 14.11% or 0.350 to 2.830. Shares in Incitec Pivot Ltd (ASX:) fell to 52-week lows; falling 6.23% or 0.200 to 3.010. Shares in Independence Group NL (ASX:) rose to 3-years highs; gaining 9.56% or 0.520 to 5.960.

The , which measures the implied volatility of S&P/ASX 200 options, was up 0.05% to 14.359.

Gold Futures for December delivery was up 0.12% or 1.85 to $ 1531.25 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in October fell 0.02% or 0.01 to hit $ 55.09 a barrel, while the November Brent oil contract fell 0.27% or 0.16 to trade at $ 59.09 a barrel.

AUD/USD was down 0.07% to 0.6732, while AUD/JPY rose 0.05% to 71.47.

The US Dollar Index Futures was down 0.08% at 98.780.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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