- Asian shares stay under pressure with the MSCI Index (ex-Japan) dropping to a three-week low.
- News of US-China trade talks in October fails to supersede political drama at the US/UK.
- The decline in China’s Industrial Profits, a lack of major catalysts add to the pessimism.
Asian traders carry bearish bias, despite upbeat trade headlines, amid increasing challenges to the US/UK leaders. Adding to the downbeat mood is China’s mixed readings of Industrial Profits as they slumped 2.0% on YoY but stood unchanged at -1.7% on MoM.
With this, the MSCI’s index of Asia Pacific shares (ex-Japan) drops to three week low while Japan’s NIKKEI registers more than 1.0% loss. Australia’s ASX 200 and New Zealand’s NZX 50 stood on the other side of the extreme, even with less than 0.50% gains, while China’s HANG SENG losses around 0.3% by the time of writing. Furthermore, India’s BSE SENSEX follows the suit amid a lack of fresh directives whereas markets in Malaysia also remain on the back foot.
The US President Donald Trump’s hardships seem to have increased after a tape showing the Republican leader misbehaving with the staff to overcome the latest charges, even by hiding the evidence, went viral. On the other hand, Brexit uncertainty also looms large with the UK Prime Minister (PM) Boris Johnson witnessing repeated humiliating defeats at the Parliament, losing the EU’s confidence and also cutting the odds of a deal.
The US and China will rejoin each other at the trade negotiation table on October 10-11 in Washington, as per the CNBC. However, Bloomberg news that the US refrains from renewing the license to do business with China’s Huawei raises bars for any breakthrough.
It should also be noted that a slew of Fed policymakers have so far avoided any bearish signals and the same seems to make the US Dollar (USD) the cleanest shirt in the dirty laundry.
Risk tone seems to have taken a halt around 1.69% amid a lack of major data/events while investors keep an eye over the heavy economic calendar from the US.
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