ZFX: tensions attention! Bearish sentiment may dominate
Stocks in Asia Pacific Region generally dropped on Friday as the initial jobless claims data of the US missed expectations again, triggering worry about the economy recovery pace in the US. The three major Wall Street indexes all fell more than 1% on Thursday, of which the Nasdaq fell nearly 2.3%.
In European session, the US futures are also under sell-off pressure, as US-China tensions weigh on sentiment, and European stocks is following the bearish momentum of Asian markets.
The latest news is that China has ordered the US to shut down the consulate in Chengdu, in response to the closure of the Chinese consulate in Houston ordered by the US.
ZFX analyst Jacob Leung said that, the negative sentiment may dominate the market trend in these days as the escalating tensions between the US and China further deteriorate rapidly.
The RMB drops to 7.02 level against the dollar, hitting by the tensions, despite the recent weakness of the dollar.
ZFX analyst Jacob Leung said that, usually the Chinese yuan would not be doing good under such situation. However, spot gold may head for its historical high these days, above $1900 level, benefiting from the weak dollar, stimulus policies all over the world, and the safe haven demand driven by China-US tensions.
On the other hand, the optimism from the vaccine hopes may be supportive. It is expected that the global stock markets would be more volatile, if the news from the US and China sparked risk aversion.
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