Asia markets mixed as US and Canada agree on renewed NAFTA

02-Oct-2018 Intellasia | CNBC | 6:00 AM Print This Post

* On Sunday, a senior US administration official said the United States and Canada had reached a deal to replace NAFTA.

* The new deal, which according to the official has been called the USMCA the United States-Mexico-Canada Agreement, came as negotiators from Ottawa and Washington raced to meet a US-imposed September 30 deadline.

* A series of data releases showed a slowdown in China’s manufacturing sector in September.

* The weaker-than-expected data came as the US-China trade war continues to escalate with no end in sight.

Asia markets were mixed on Monday afternoon as the US and Canada announced that they had reached a deal to replace the North American Free Trade Agreement.

The Nikkei 225 continued its advance higher by 0.57 percent while the Topix recovered to trade largely flat in the afternoon, as major automakers such as Toyota and Nissan continued to see declines.

The moves in Tokyo came on the back of the release of a survey conducted by the Bank of Japan which showed business confidence among the country’s big manufacturers falling for the third consecutive quarter.

Meanwhile, in South Korea, the Kospi remained lower by 0.31 percent, despite a private survey showing factory activity expanding in September for the first time since March 2018.

Down Under, the ASX 200 slipped by 0.71 percent, with most sectors still trading in negative territory. The heavily weighted financial sector fell by 1.5 percent, with Commonwealth Bank of Australia sliding by 1.55 percent and AMP trading down by 1.88 percent.

The moves in the financial sector Down Under came on the back of an interim report by Australia’s Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which revealed instances of bribery, fraud, fee-gouging and board-level deception within the sector.

The Chinese and Hong Kong markets are closed today.

The US and Canada reach a trade deal at the eleventh hour

On Sunday, a senior US administration official said the United States and Canada had reached a deal to replace NAFTA.

The new deal, which according to the official has been called the USMCA the United States-Mexico-Canada Agreement, came as negotiators from Ottawa and Washington raced to meet a US-imposed September 30 deadline.

“It’s good news all around,” Debra Steger, a professor at the University of Ottawa, said to CNBC’s Nancy Hungerford this morning.

Terming the deal as one that “happened at the eleventh hour on the last day,” Steger said the new agreement appeared to be a “win-win for all three countries.”

Symbol Name Price Change percentChange

NIKKEI Nikkei 225 Index 24245.76 125.72 0.52 percent

HSI Hang Seng Index 27788.52 72.85 0.26 percent

ASX 200 S&P/ASX 200 6172.30 -35.30 -0.57 percent

SHANGHAI Shanghai 2821.35 29.58 1.06 percent

KOSPI KOSPI Index 2338.88 -4.19 -0.18 percent

CNBC 100 CNBC 100 ASIA IDX 8227.06 -20.48 -0.26 percent

Slowdown in China’s manufacturing sector

On Sunday, the release of data showed growth in China’s manufacturing sector slowing down in September, with both external and domestic demand weakening. The Caixin/Markit Manufacturing Purchasing managers’ Index which focuses on small and medium-sized firms in China fell to 50.0 in September from 50.6 in August. Economists polled by Reuters had expected a reading of 50.5 on average.

The data comes as the US-China trade war continues to escalate, with new tariffs imposed between the two countries on September 24 and Washington threatening to slap tariffs on virtually all Chinese imports into the United States.

S&P sees best quarter since 2013

In market action on Wall Street last Friday, the S&P 500 saw its best quarterly gain since the fourth quarter of 2013, rising 7.2 percent. The Nasdaq Composite also saw a 7.1 percent gain for the quarter while the Dow Jones Industrial Average advanced by 9.3 percent. The gains came even though the three indexes closed little changed for the trading day on Friday.

Currencies and oil

In currency news, the US dollar index which tracks the greenback against a basket of peers was at 95.190 as of 11:51 a.m. HK/SIN, sliding from its earlier high.

The Japanese yen was weaker at 113.88 against the dollar, while the Australian dollar also slipped to $0.7218, as of 11:52 a.m. HK/SIN.

In the oil markets, prices continued to trend higher in the afternoon of Asian trade. The global benchmark Brent crude futures contract remained higher by 0.53 percent at $83.17 per barrel, while the US crude futures contract was higher by 0.38 percent at $73.53 percent per barrel.

https://www.cnbc.com/2018/10/01/asia-markets-china-pmi-trade-currencies-in-focus.html

 


Category: FinanceAsia

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