Irish Backstop

Market Review 04-03

Market Review 04-03

Forex News

Britain is seeking legally binding changes to Irish backstop

From: Reuters.com

Britain’s top government lawyer is seeking legally binding changes to the Irish border backstop and the Brexit negotiations are at a critical stage, Communities Secretary James Brokenshire said on Monday.

“The attorney general continues with his work to ensure we get legally-binding changes to ensure that we are not locked in the backstop,” Brokenshire said.

“That is fundamentally what this issue is about – ensuring that we are not trapped in this backstop arrangement which has caused so much concern, so much anxiety amongst my colleagues and MPs across the House,” he said.

“The negotiations are at a critical and sensitive point. People just need to have this little bit of patience to see how this now comes forward.”

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Yuan Rally Seen Ebbing as Economy Woes Cloud Trade Progress

From: Bloomberg.com

  • China’s currency has risen to highest since July versus peers
  • NatWest expects yuan to weaken to 6.8 per dollar by year-end

The rally in the yuan is nearing an end as focus shifts to the health of the economy from trade negotiations, according to NatWest Markets Plc.

The currency has climbed 2.8 percent this year, making it the best performer in Asia, amid signs of progress in talks between China and the U.S. The yuan advanced 0.29 percent to 6.6883 per dollar as of 12:27 p.m. in Shanghai, after the two countries were said to be close to a trade deal that could lift most or all U.S. tariffs.

“The market will pay less attention to bilateral trade developments, and will instead re-focus on China data,” said Maximillian Lin, emerging-markets Asia strategist at NatWest Markets in Singapore, who spoke before the latest reported trade development. The yuan will weaken to 6.8 per dollar by year-end after a modest gain in the coming month, as growth slows and the current-account surplus shrinks, he added.

A Chinese manufacturing gauge showed activity contracting in February, suggesting authorities may need to further loosen monetary policy, which could pressure the currency. The nation’s economic growth will slow to 6.2 percent in the fourth quarter, while the People’s Bank of China will cut lenders’ reserve requirements by another 150 basis points this year, according to a Bloomberg survey

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Stock Market News

Dow Jones Awaits Trade Data, DAX and ASX 200 Look to Rate Decisions

From: DailyFX.com

  • The Dow Jones will look to trade and unemployment data for trend continuation purposes
  • Germany’s DAX 30 awaits a rate decision from the ECB on Wednesday
  • Australia’s central bank is also slated for a rate decision, a key event for the ASX 200

DOW JONES FUNDAMENTAL OUTLOOK

Forecast: Mixed

The Dow Jones Industrial Average ended the week lower for the first time in 9 weeks Friday. The streak of higher weekly closes was the longest for the Dow since 1995. Still, the index trades slightly below key technical resistance and data in the week ahead may dictate price action moving forward.

On Monday, US trade data is due and will be the first important print for the index next week. A strong performance could surprise markets and suggest the current US-China trade war is making headways in reducing the country’s trade deficit.

Check out our interactive infographic A Brief Trade War History for insight on the current economic conflict and how future ones may develop.

Later in the week, the Fed’s Beige Book is due on Wednesday and unemployment figures are scheduled to be released on Friday. Unemployment has been a key tailwind in sentiment indicators and an important component of the recent strength displayed by the Dow Jones and S&P 500.

DAX 30 LOOKS TO THE ECB

Forecast: Mixed

Germany’s DAX 30 will look to a rate decision from the European Central Bank. While no change in rates is expected, language and tone will be critical in gauging the bank’s outlook for future rate movements. Any hawkish intentions, though highly unlikely, could spell disaster for the German equity index as it mounts a rebound in the new year.

Similarly, trade wars will remain a key factor for the DAX. US President Trump has not announced any progress in his consideration of auto tariffs on the European Union, but the uncertainty will remain a headwind. Follow @PeterHanksFX on Twitter for live equity updates and analysis.

AUSTRALIA’S ASX 200 EYES THE RBA

Forecast: Bearish

Like the DAX, the Australian ASX 200 will eye its own central bank. While no change is expected out of the RBA, language and tone again remain key for the Australian index. Strong Australian employment data but weak Chinese data paint a mixed picture for the ASX, but the RBA could look to clarify their intentions and provide stability for the index.

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Stocks rally as U.S., China inch closer to trade deal

From: Reuters.com

Asian shares started the week on the front foot on signs the United States and China were close to striking a tariff deal to end their protracted trade war while the dollar eased as traders wagered Federal Reserve policy would remain accommodative.

The Wall Street Journal reported on Sunday Washington could lift most or all of its tariffs on Beijing while a summit between U.S. President Donald Trump and his Chinese counterpart Xi Jinping to sign a final trade deal could happen later this month.

That followed comments from Trump last week that he had asked China to immediately remove all tariffs on U.S. agricultural products because trade talks were progressing well. He also delayed previously scheduled plans to impose 25 percent tariffs on Chinese goods.

All of that proved positive for risk sentiment with E-mini futures for the S&P500 and the Dow rising 0.4 percent each on Monday. Spreadbetters pointed to a positive start for Europe as London’s FTSE futures added 0.5 percent.

In Asia, Chinese shares were the biggest gainers, with the blue-chip index up as much as 3 percent. Australian shares rose 0.4 percent and Hong Kong’s Hang Seng index added 0.7 percent.

That left MSCI’s broadest index of Asia-Pacific shares outside Japan with gains of 0.3 percent. The index has risen almost 10 percent so far this year.

Japan’s Nikkei strengthened more than 1 percent.

“Following a robust recovery for risk assets since the start of the year, a number of events in March are going to set the tone for global investors on whether this rebound is sustainable,” said Tai Hui, Asia Pacific Chief Market Strategist at JPMorgan Asset Management.

Tai listed the prospective Trump-Xi trade summit among such events while China’s National People’s Congress could provide clues on new policies aimed at boosting Asia’s largest economy.

“These policies will be influential to maintain the upbeat onshore sentiment that has driven a strong rebound in the A-share market,” Tai said.

China’s CSI300 index rallied last week after index provider MSCI quadrupled its weighting for mainland shares in its global benchmarks.

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Cryptocurrency News

Most Top Cryptos See Minor Losses as Bitcoin Hovers Over $3,850

From: Cointelegraph.com

The top 20 cryptocurrencies are reporting minor losses on the day to press time. Bitcoin (BTC) is hovering just over the $3,850 mark again, according to Coin360 data.

At press time, Bitcoin is down a fraction of a percent on the day, trading at around $3,853, according to CoinMarketCap data. Looking at its weekly chart, the current price is nearly half of a percent lower than $3,870, the price at which Bitcoin started the week.

The day before yesterday, blockchain development company Blockstream released a new version of its Bitcoin (BTC) scalability solution, c-lightning.

Ethereum (ETH) is holding its position as the largest altcoin by market cap, which by press time is over $14 billion. The second-largest altcoin, Ripple (XRP), has a market cap of just under $13 billion by press time.

ETH is down by 0.64 percent over the last 24 hours, according to CoinMarketCap. At press time, ETH is trading around $133, after having started the day one dollar higher. On its weekly chart, Ethereum has seen its value decrease by about 7.5 percent from $143, the price at which the coin started the week.

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