Stocks are pointing to a softer as investors weigh up moves by President Trump taking aim at Chinese tech, impressive Chinese and German trade data and nerves ahead of the non-farm payroll report after a week is disappointing labour market data.
Trump's executive order giving US firm 45 day to stop dealings with ByDance's TikTok and Tencent's WeChat is the latest move by the White House in an increasingly broad campaign against China dragging on sentiment
Earlier on Thursday Trump also advised that Chinese firms listed on US stock exchanges delisted unless they can provide US regulators with access to their accounts.
These moves are unlikely to be taken lying down by China and could potentially see China blocking US big Tech such as Apple or Microsoft. Whilst tech was always an undercurrent in the US - Sino trade war, this latest move points to the potential start of a more explicit tech war?
Timing is everything and doesn't bode well for the next US – Chinese meeting over progress in the Phase one trade deal next week.
Chinese exports surge
The attacks by Trump and flaring up of US – Sino tensions have overshadowed the surge in Chinese exports. Trade data from China showed that exports soared 7.2% compared to a year earlier. This is significantly ahead of 0.2% increase forecast and points to the Chinese economic recovery gaining momentum.
German exports jump 14.9%
Upbeat data from Germany is going someway to off set the Trump inspired downbeat mood. German exports rose in June for a second straight month and rose by a convincing 14.9% in June, whilst imports increased 7%. The data adds to mounting evidence that the economic recovery in Germany is on a solid footing and comes following factory orders data yesterday which smashed expectations.
Still no US rescue package in sight
Developments on Capitol Hill will be in focus as the Democrats and Republicans have so far failed to agree on a new stimulus package for America to support it through the coronavirus crisis. The two sides remain far apart on what size the package should be. The summer recess is due to start today.
US NFP in focus
Attention will now turn towards US non-farm payroll data. Expectations are for 1.5 million new jobs to have been created in the US in July. This is down significantly from last month's 4.8 million. Lead indicators this week from the ADP Payroll report and the employment subcomponent of the ISM non manufacturing report have been disappointing and point to the recovery in the labour market stalling, hampered by a resurgence in coronavirus cases since mid-June.
Dax chart
CFD and forex trading are leveraged products and can result in losses that exceed your deposits. They may not be suitable for everyone. Ensure you fully understand the risks. From time to time, City Index Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material. As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed
Recommended Content
Editors’ Picks
EUR/USD stays in daily range slightly below 1.0900
EUR/USD continues to move up and down in a narrow band slightly below 1.0900 in the second half of the day on Monday. The modest improvement seen in risk mood makes it difficult for the US Dollar to find demand and helps the pair stay in range.
GBP/USD treads water above 1.2900 amid risk recovery
GBP/USD is keeping its range play intact above 1.2900 in the American session on Monday. The positive shift seen in risk sentiment doesn't allow the US Dollar to gather strength and helps the pair hold its ground ahead of this week's key data releases.
Gold extends slide below $2,400
Gold stays under persistent bearish pressure after breaking below the key $2,400 level and trades at its lowest level in over a week below $2,390. In the absence of fundamental drivers, technical developments seem to be causing XAU/USD to stretch lower.
Crypto Today: Bitcoin is less than 10% away from all-time high as Ethereum ETF approval anticipation brews
Bitcoin trades around $68,000 early on Monday, less than 10% away from its all-time high of $73,777 on Binance. Ethereum ETF anticipation brews among traders and Ether investment products see inflow of over $45 million in the past week.
Election volatility and tech earnings take centre stage
/stock-market-graph-gm532464153-55981218_XtraSmall.jpg)
The US Dollar managed to end the week higher as Trump Trades ensued. Safe-havens CHF and JPY were also higher while activity currencies such as NOK and NZD underperformed.