- Asian stocks lack clear directional bias amid renewed trade tensions.
- Risk assets could pick up a strong bid if Chia trade data betters estimates.
Asian equity markets are trading mixed at press time with upside likely capped by caution ahead of China trade data and renewed Sino-US trade tensions.
As of writing, Japan’s Nikkei index is trading 0.16% higher at 21,677 while Australia’s S&P/ASX 200 is down 4 points at 6,712.
Stocks in New Zealand and Hong Kong are trading flat-to-negative while South Korea’s Kospi is flashing moderate gains. The Shanghai Composite is adding 13 points or 0.44% at 2,930.
China data scheduled for release later today is expected to show the country’s trade surplus widened to CNY 284.674 billion in June from May’s print of CNY 279.12 billion.
Exports are forecasted to rise 21.4%, having risen by 7.7% in May while imports are forecasted to rise 8.3% following May’s drop of 2.5%.
A better-than-expected export data – a sign of uptick in global demand – and an upbeat imports data – a sign of healthy domestic demand – will likely put a bid under the global risky assets.
The gains, however, may not happen or could be short-lived, if details reveal a surge in China’s surplus with the US. That will likely irk Washington, emboldening Trump to take more impose more punitive tariffs on Chinese goods.
It is worth noting that President Trump and his Chinese counterpart Xi Jinping announced a trade truce after their meeting in Japan last month.
Negative headlines, however, are once again beginning to emerge. Trump said on Thursday that China was not living up to promise it made on buying the US far products.