Despite the drop of Wall Street overnight, stocks in Asia Pacific were generally higher on Friday as market sentiment improved, following the rebound of the US indexes futures.
Once again, investors are closely watching the tech stocks movements as the Nasdaq dropped nearly 2%, showing a comparative heavier sell-off pressure. The Dow fell 1.45%, while the S&P slipped 1.76%.
Stepping into the European trading session, European stocks are expected to be mixed, as crisis in EU-UK trade deal continues to weigh on the sentiment over the region.
On Thursday, the EU urged the UK to stop the “Internal Market Bill”, which is deemed to be a violation of the Brexit Withdrawal Agreement, or even international law. However, the Prime Minister of the UK, Boris Johnson, refused to do so, the EU now is threatening a legal action may go ahead.
In FX, the dollar was steadied on Friday earlier session, after a volatile move overnight. The latest policy direction from ECB boosted the euro up to 1.1917, weakening the dollar in the US trading session. But, the tumble of the US stocks sparked risk aversion, triggering a rebound of the dollar against the major currencies.
ECB President Christine Lagarde insisted that the central bank would not target the exchange rate, lowering the concerns over the recent strength of the euro.
ZFX analyst Jacob Leung said that, “Cash is King” would be the market theme these days. The dollar is clearly showing what is safe-haven, while the trend of gold price recently lost its correlation between risk sentiment. Any sharp rebound in the market does not mean the end of the market adjustment, especially negative factors were dominated on Wednesday and Thursday.
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