ZFX: Not harsh? Markets optimism resumed after Trump’s response
Market sentiment was very cautious on Friday before Trump’s press conference. Investors were worried that the US would take aggressive measures against China, including economic sanctions. However, President Trump did not mention much that the traders feared. With lack of details, the Wall Street bounced back in the US late session, which the Dow edged lower, S&P 500 rose 0.48%, and the Nasdaq performed the best closing 1.29% higher.
Stocks in Asia Pacific were higher on Monday due to the de-escalation of China-US tension. Investors believe that there is no substantial effect on Phase 1 trade agreement between China and the US.
ZFX analyst Jacob Leung said that it is expected that some safe-haven bets will be unwinding this week due to the ease of China-US tension, at least in the short term. The market now is assuming “more bark than bite”.
The greenback dropped to 98 mark and currencies like Aussie, Euro and Sterling, even oil and gold, all are trading higher. The return of risk appetite lowers the safe-haven demand, and investors are also monitoring the widespread civil unrest in the US, which may hit the economic recovery from the coronavirus outbreak.
ZFX analyst Jacob Leung said that investors were relieved and now the sentiment tends to be “risk on” again. The weak of dollar would be supportive to the markets. However, the tension is just very uncertain and the market is changing all the times. We cannot rule out everything possible in the coming days or weeks.
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