(26 NOVEMBER 2018)DAILY MARKET BRIEF 2:Asian and European shares higher amid last Friday's slump
Closing in negative territory during the previous week's trading session - amid growing worries over a potential breakthrough in US-China trade discord and fears of a growth slowdown in Asia - Asian stock markets have been rising higher, despite uncertainties relating to a potential easing of trade tensions as Donald Trump and Xi Jinping meet at the G20 summit. There are hopes of a slowdown in pace of the Fed’s tightening cycles, whose November meeting minutes were published on Thursday, providing a better overview of its stance. The Nikkei 225 has been rising by + 0.76% while the Hong Kong Hang Seng and China mainland respectively advanced by +1.73% and closed flat (-0.07%), with energy shares down due to sharp drop in crude over the last one and a half months.
Indeed, it appears that today’s trading session should remain in the green globally. US futures and European markets are rising while positive developments regarding EU members' approval of a transitory Brexit solution and Italy’s complacency relating to its budget expenses (recent publications mention a reduction of 10 – 20 BPS, despite European Commission deficit expectations set at 2.90% for 2019) push European shares above 1% across the board. The Italian FTSE MIB surges as much as 3% in early trading, while the Euro Stoxx 50 rises by +1.42%.
Accordingly, we expect Asian shares to head higher following the G20 summit, as a slight relief in US-China trade talks should raise up investor sentiment. USD/CNY, currently trading at 6.9383, is expected to remain directionless - maintained at 6.95.
