Asian dealers trade carefully before Trump-Xi, oil extends gains

01-Dec-2018 Intellasia | AFP | 6:14 AM Print This Post

Asian markets were mixed Friday with dealers moving cautiously at the end of a broadly upbeat week with focus turning to the much-anticipated meeting between Donald Trump and Xi Jinping.

Energy firms were among the best performers after a rally in oil prices, while high-yielding and emerging market currencies continued Thursday’s advances against the dollar as the Federal Reserve shows signs it will slow down its pace of interest rate hikes.

While the outcome of Saturday’s crunch talks between Trump and Xi hangs in the balance, there are hopes the heads of the world’s top two economies can find a way to ease their trade row that has seen them exchange deep import tariffs.

Ahead of the leaders’ arrival in Buenos Aires late Thursday for the G20 meeting, there have been conflicting messages coming out of Washington about the chances of a breakthrough, with most observers saying they do not expect any major announcements.

“I wouldn’t be surprised at the end of this weekend if the US and China didn’t announce a concord that basically set down a path to help resolve the trade frictions,” Scott Minerd, chief investment officer at Guggenheim Partners, told Bloomberg TV.

“I don’t think that out of the meeting there’s going to come much substance, but there will be a sort of set of principles that will be established to start the process of bringing an end to the trade war.”

– OPEC meeting up next –

On Asian equity markets Hong Kong added 0.6 percent, while Shanghai gained 0.1 percent, with dealers there poring over data showing Chinese manufacturing stalled in November as the effects of Trump’s multi billion-dollar tariffs begin to bite.

Singapore gained 0.3 percent, while Wellington and Taipei each rose 0.4 percent.

However, Tokyo reversed early gains to end the morning marginally lower, Sydney shed 1.3 percent and Seoul was off 0.4 percent.

Past the G20 meeting, traders are looking to the following weekend’s gathering of OPEC and non-OPEC oil producers, where Saudi Arabia and others are expected to cut output in a bid to support prices.

Crude edged up Friday, a day after enjoying a much-needed rally on a report that Russia will join in the reduction, providing a boost to regional energy firms.

“If a meaningful deal is reached between OPEC and Russia to tackle glut problems, we can probably expect a meaningful rebound in energy prices,” said Margaret Yan Yang, market analyst with CMC Markets Singapore.

However, others pointed out that no one knows how much and for how long the output cuts will be, while at the same time the US continues to ramp up production.

Stephen Innes, head of Asia-Pacific trade at OANDA, added: “With traders already anticipating a one million barrels per day cut, which is arguably priced in, it will probably take a much deeper cut to jolt the market into a short covering rally.

“Otherwise, the market falls prey to the prevailing bearish sentiment that will continue to drive prices lower on the premise the reduction might not be sufficient enough to draw down surplus supplies.”

– Key figures around 0230 GMT –

TokyoNikkei 225: FLAT at 22,261.92 (break)

Hong KongHang Seng: UP 0.6 percent at 26,618.46

ShanghaiComposite: UP 0.1 percent at 2,569.96

Pound/dollar: DOWN at $1.2774 from $1.2783 at 2200 GMT

euro/pound: UP at 89.14 pence from 89.01 pence

euro/dollar: DOWN at $1.1385 from $1.1387

Dollar/yen: DOWN at 113.40 yen from 113.45 yen

OilWest Texas Intermediate: UP 10 cents at $51.55 per barrel

OilBrent Crude: UP 15 cents at $59.66 per barrel

New YorkDow Jones: DOWN 0.1 percent at 25,338.84 (close)

LondonFTSE 100: UP 0.5 percent at 7,038.95 (close)–finance.html


Category: FinanceAsia

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