HONG KONG, Sept 4, 2018 (BSS/AFP) – Asian markets fluctuated on Tuesday
with investors moving cautiously as they await the latest developments in
Donald Trump’s trade spats with China and Canada.
With US markets closed for the Labor Day holiday, there were few catalysts
to drive business though dealers remain nervous after Trump said he wanted to
impose fresh tariffs ion a huge swathe of Chinese goods by the end of this
week.
There is also growing nervousness about emerging market currencies, with
Argentina’s peso and the Turkish lira continuing to take a battering.
In early trade Hong Kong was up 0.1 percent and Shanghai added 0.2 percent
while Tokyo ended the morning 0.1 percent lower.
Singapore rose 0.2 percent and Seoul was up 0.1 percent, while there were
also gains in Wellington, Taipei, Manila and Jakarta. However, Sydney slipped
0.3 percent.
Dealers are now keeping a close eye on Trump’s next move after he said last
week he wanted to impose tariffs on $200 billion of Chinese imports as soon
as public consultation ends on Thursday, adding to the $50 billion already
targeted.
Also, US and Canadian officials are still due to resume talks Wednesday on
a revised NAFTA deal, after they failed to reach an agreement last week. That
led Trump to tweet that he would leave his northern neighbours out of a final
pact. Mexico and the US have already struck a deal.
Friday then sees the release of key US jobs data, which could give a clue
to the Federal Reserve’s plans for raising interest rates.
– ‘Contagion risk’ –
On currency markets the pound continues to struggle under Brexit
uncertainty as British Prime Minister Theresa May faces a rebellion in her
own party over a Brexit blueprint.
The Turkish lira was slightly down at 6.6 to the dollar, having enjoyed a
modest bounce Monday after the central bank said it would take the “necessary
actions to support price stability”.
However, it continues to face headwinds as the bank has refused to lift
interest rates to combat surging prices, putting pressure on the embattled
economy.
The troubles in Turkey and Argentina, which has seen its peso collapse in
recent weeks, are rattling markets on fears their crises could spread.
“For now most of emerging market woes can be attributed to country-specific
issues,” Rodrigo Catril, senior foreign exchange strategist at National
Australia Bank, said in a note.
“But with dollar liquidity shrinking as the Fed is expected to continue
with it gradual tightening strategy and with President Trump seemingly keen
on pursuing its hard line on trade policy, EM contagion risk is still alive
and kicking.”
Other emerging market and high-yielding currencies were mostly lower. The
Indian rupee is wallowing around record lows of 71.2 to the dollar, while the
Indonesian rupiah is around levels seen in the Asian financial crisis 20
years ago.
South Korea’s won and the Australian dollar were each down about 0.3
percent, while the South African rand lost 0.5 percent and Mexico’s peso lost
0.4 percent.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: DOWN 0.1 percent at 22,697.08 (break)
Hong Kong – Hang Seng: UP 0.1 percent at 27,727.97
Shanghai – Composite: UP 0.2 percent at 2,726.06
Euro/dollar: DOWN at $1.1602 from $1.1616 late Monday
Pound/dollar: DOWN at $1.2860 from $1.2888
Dollar/yen: UP at 111.15 yen from 111.08 yen
Oil – West Texas Intermediate: UP 26 cents at $70.06 per barrel
Oil – Brent Crude: DOWN four cents at $78.11
New York – CLOSED for public holiday
London – FTSE 100: UP 1.0 percent at 7,504.60 (close)