Shares floated lower due to lack of trade progress, the dollar slipped again
Global stocks floated lower on Tuesday and the dollar declined to the main colleagues as concerns about the tariffs and their impact on the economy to survive, while focus switched to the announcement of the Federal Reserve policy on Wednesday.
Investor’s attention has been likely to relieve trade tensions between the US and China after Beijing last week said he was evaluating the offer from Washington to hold talks on tariffs.
US President Donald Trump said on Sunday that Washington met with many countries, including China, and that his main priority with China was to get a fair agreement.
“We have seen backpes and trade risks have become lower,” said Lars Skovgaard, senior investment strategy expert at Danske Bank (CSE: Danske).
But with a few details that came out about trade discussions, investors have been allowed to try to understand the headlines coming out of the White House.
“Now we need to see that some agreements are announced if no stock increases will fade again,” Skovgaard added.
STOXX 600 Europe fell 0.4% on Tuesday but still close to its closing rate on April 2, Hari Trump announced its tariff proposal.
FTSE 100 England rose 0.1% and was on the track for the 16th positive closing record, while Dax Germany fell 1%.
Investors also processed a surprise from Germany where conservative leader Friedrich Merz failed to gather the majority of parliament needed to become a chance to decline in an unexpected setback for his new coalition with social Democrats.
In Asia, the area of MSCI shares in Asia-Pacific outside of Japan, flat with Japan is closed for a vacation.
The Chinese market returned from a long vacation with the Blue-Chip index and Hang Seng Hong Kong both rose around 1%.
The attention shifted to the Federal Reserve policy decision on Wednesday, where the central bank is widely expected to keep the interest rates stable but the highlight will occur in how policy makers tend to navigate paths that are risen by tariffs.
“The Fed remains trapped between stones and difficult places,” said Christian Scherrmann, Head of US Economist DWS. “We think they will choose a tone that is a little more hawkish, but rather towards the pause that is expanded than potential climbing.”
Traders have a price in 75 basis for this year’s easing point with the first step that may occur in July, LSEG data shows.
Slip Dollar, Ride vs Fx Asia
Trump’s uncertain trading policy has triggered a significant wave of dollar sales since April when investors switch from US assets, pushing Euros, Yen and Swiss francs higher.
Euro on Tuesday rose 0.3% against the dollar at $ 1,1347, and Yen rose 0.5% at 142.95 per dollar.
The dollar sales have spread to other FX Asia, which is underlined by the record of the Taiwan dollar record in this new session, which has triggered speculation that regional foreign exchange revaluation is possible to win US trade concessions.
Meetings generally suggest that large releases are ongoing and highlighting one economy, among many people, where for many years the big trade surplus has built a large dollar position on exporters and insurance companies that are now under questions and anxiety.
The Taiwan dollar was quite calm on the last Tuesday taking 30.28 per US dollar, not far from the highest almost three years 29.59 which was touched on Monday. [FRX/]
The focus is switching to Hong Kong on Tuesday, where the Central Bank De Facto bought $ 7.8 billion to stop local currencies from strengthening and breaking their pegs to Greenback.
“The actual action today is in Asia FX,” said Charu Chanana, head of investment strategy in Saxo in Singapore.
“If this currency continues to strengthen sharply, it can trigger the concern of ‘the Crisis of the Asian Currency Reverse’, with the potential for the effects of ripples on the bond market in the midst of concerns that Asian institutions judge their exposure that is not determined by Treasury’s ownership.”
Hong Kong’s monetary authority said on Tuesday it had diversified the currency exposure in his investment portfolio to manage risk.
On land, Yuan China has strengthened to the highest level since November at 7,2105 per dollar. [CNY/]
In commodities, oil rises after reaching the lowest position of four years in the previous session driven by the OPEC+ decision to accelerate the increase in output. Brent Minah Mahawi grew up 2.2% to $ 61.55 per barrel.
Source: Reuters
