Asian share markets fought to keep a global rebound alive on Tuesday after U.S. President Donald Trump seemed to quash hopes of a trade truce with China, clouding what had been a bright start to the week. In an interview with the Wall Street Journal, Trump said he expects to move ahead with raising tariffs on $200 billion in Chinese imports to 25 percent from 10 percent currently. Trump said it was “highly unlikely” he would accept China’s request to hold off on the increase, planned for Jan. 1. The comments ran counter to recent speculation about a possible deal when Trump meets Chinese President Xi Jinping at the G20 summit in Buenos Aires later this week, combined with last week’s harsh report from the U.S. trade representative, investors have only the flimsiest hope that the Trump-Xi meeting in Argentina will amount to more than a hill of soybeans.
In main currencies, EUR/USD round-tripped from 1.1330 to 1.1385 and back. ECB speakers, notably Chief Economist Praet and President Draghi, noted the moderation in recent data had been deeper than expected and that uncertainties such as protectionism had risen. Regarding GBP/USD, is trading little changed on the upside around 1.2840 on Monday after the UK and the EU sealed the Brexit agreement at Sunday Brexit summit, supporting the UK Prime Minister Theresa May in her effort to have the deal passed in the UK parliament.
In commodities, Gold prices dropped on Tuesday in Asia while the dollar also slid. Traders will take cues from Federal Reserve Chairman Jerome Powell’s speech on Wednesday to see which direction the precious metal will go. Oil had climbed nearly 3 percent on Monday but that was seen as largely a technical correction after weeks of heavy losses, driven both by oversupply and demand worries. U.S. crude was off 9 cents at $51.54 a barrel, while Brent futures inched up 3 cents to $60.51.
For today the high impact news in the economic calendar include: CB Consumer Confidence, RBNZ Financial Stability Report and RBNZ Gov Orr Speech.