Jan 13, 2020: Asian markets were mixed Monday as investor attention turned from the Middle East to the global economic outlook and this week's planned signing of the China-US trade pact.
While the optimism that characterised the end of 2019 is returning to trading floors, dealers were left a little disappointed by a below-par jobs report out of Washington, which also showed a slower pace of wage growth.
All three main indexes on Wall Street ended in negative territory following the reading, with profit-taking also playing a role, having hit new record highs.
However, analysts pointed out that while the data missed expectations, it did suggest that the Federal Reserve will likely maintain interest rates at low levels for some time to come, with some tipping the next move could be another cut.
In early trade, Hong Kong rose 0.2 percent, Singapore added 0.1 percent, Seoul jumped 0.6 percent and Jakarta gained 0.2 percent.
Taipei rose 0.4 percent after Tsai Ing-wen won a landslide victory at the weekend and was returned as the island's president for a second term, with investors cheering the removal of uncertainty caused by the election.
The Taiex is sitting at its highest levels in three decades, while the Taiwan dollar is also at an 18-month peak, boosted by government moves to attract foreign cash and encourage local firms to invest at home.
Among other bourses, Shanghai fell 0.4 percent, Sydney shed 0.6 percent and Wellington slipped 0.2 percent. Tokyo is closed for a holiday.
– Dollar slips –
Focus this week is on Washington, where China and the United States will finally put pen to paper on their much-vaunted “phase one” trade deal, which has lowered tensions between the economic superpowers and boosted hopes for the global economy.
While there are not expected to be any major announcements at the signing, investors will be looking for signs of progress on the next part of negotiations for a wider agreement.
“Provided the deal inks a commitment from China to increase agricultural products and outlines a dependable enforcement mechanism, the market will go merrily along the way,” said AxiTrader's Stephen Innes.
“Traders are probably not too concerned about a currency pact as China should hold the line on any weakness in the yuan as we roll forward to negotiating phase two.”
On foreign exchanges, the dollar was down against most high-yielding, riskier units as confidence returns to markets after the volatile start to the year, with the Indonesian rupiah and the South Korean won among the best performers, rising 0.5 percent apiece.
Oil prices dropped again on waning concerns about Middle East supplies, rising US shale production and following a pick-up in output from non-OPEC countries such as Norway.
– Key figures at 0230 GMT –
- Hong Kong – Hang Seng: UP 0.2 percent at 28,702.02
- Shanghai – Composite: DOWN 0.4 percent at 3,080.10
- Tokyo – Nikkei 225: Closed for a public holiday
- Pound/dollar: DOWN at $1.3038 from $1.3063 at 2100 GMT Friday
- Euro/pound: UP at 85.29 pence from 85.16 pence
- Euro/dollar: UP at $1.1122 from $1.1120
- Dollar/yen: UP at 109.61 yen from 109.47 yen
- Brent Crude: DOWN 12 cents at $64.86 per barrel
- West Texas Intermediate: DOWN seven cents at $58.97 per barrel
- New York – Dow: DOWN 0.5 percent at 28,823.77 (close)
- London – FTSE 100: DOWN 0.1 percent at 7,587.85 (close).