Market News & Analysis
Market Brief: Trade Troubles Tank Risk Appetite
Matt Weller, CFA, CMT December 4, 2019 8:03 AM
View our guide on how to interpret the FX Dashboard.
- Despite announcing a deal “in principle” two months ago, the US-China “phase one” trade agreement appears to be in jeopardy once more. In addition to this week’s protectionist actions and rhetoric against South American nations and France, President Trump implied that there is “no deadline” for the phase one deal and that it may have to wait until after the 2020 election.
- Later, Commerce Secretary Wilbur Ross suggested the US would go through with another round of tariffs on Chinese goods in two weeks’ time unless there was substantial trade progress.
- The IEA stated that OPEC is likely to delay its decision on output “until the market becomes clearer” later this week.
- FX: The British pound was the strongest major currency on the day (see four possible scenarios we’ll be watching ahead of next week’s election!). The US dollar was the weakest major.
- Commodities: Gold gained nearly 1% in a safe haven bid; oil tacked on about 0.5% on the day.
- US indices closed nearly 1% lower on the day on concerns over the fate of the long-promised “phase 1” trade deal between the US and China, though indices did finish off the morning’s worst levels.
- REITs (XLRE) were the strongest major sector on the day (and only one of two, along with Utilities (XLU) to rise). Energy (XLE) and Financials (XLF) brought up the rear.
From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.