Chinese spy chips are found in devices used by US Companies

Daily Analysis - 05/10/2018

US markets have a trade war advantage over the Chinese

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While the US markets are on a break and Chinese shares on a bearish mode, it seems that the U.S. stocks are overcoming the escalating trade war notably better than China's. One of the reasons for the trend is because of Chinese markets' vulnerability to non-energy goods, according to a research issued this Summer by Axioma, a risk, and performance analytics provider. Diana R. Rudean, director of applied research at Axioma said. “The tariff spat caught China more exposed to changes in broad non-energy commodity prices, and the recent downturn in these commodities has weighed heavily on the Chinese market," Changes in the commodity trade are the first indications of global economic strength and trade flows and are particularly related in the continuing trade conflict as China consumes much of the world's raw materials.

Gold little changed


On Friday Gold prices were calm while investors continued there cautious approach after the U.S. Treasury yields scored multi-year tops and on expectations that solid monthly employment data could support the Federal Reserve's position for a tighter monetary policy. Investors anticipated scouring the U.S. government's September payroll statement programmed for an announcement on Friday and watch closely for clues of wage growth. Reuters survey revealed economists on average anticipate a rise of 185,000 in September after a jump of 201,000 in August. Spot gold inched down about 0.1% at $1,198.39 an ounce. It increased about 0.6% for the week and was on course to score its highest weekly gain in six.

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Oil going up ahead of U.S. penalties on Iran


On Friday Oil prices went up as traders expected a tighter market due to U.S. penalties on Iran's crude exportation, which are estimated to start next month.

U.S. West Texas Intermediate crude futures rose about 47 cents, at $74.79 a barrel. The profits supported to get back some of the losses from the last session due to growing U.S. inventories and after Saudi Arabia and Russia said they would increase output to at least partially, make up for coming disruptions from Iran. International benchmark Brent crude oil futures were at $84.98 per barrel, went up 40 cents, or 0.5% from their last close. "Brent front-month prices are up 6 percent over the last week as it becomes increasingly apparent that Iranian exports could fall below 1 million barrels per day in November," said U.S. bank Jefferies on Friday.

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European markets seen mixed


EU stocks are estimated to start mixed this Friday morning, while traders are waiting for important jobs report after benchmark U.S. Treasury yields rose to a new 7-year high. The DAX and CAC are both anticipated to start little changed from the past session while FTSE 100 is seen 16 points higher at 7,433. Market focus is mostly tuned to a bearish mode in U.S. bond yields after strong economic data increased concerns regards to inflation and the risk of faster-than-expected interest rate hikes.

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