Fresh hopes for trade war

Daily Analysis - 18/01/2019

Dollar gains on hopes for a resolution regarding trade war

On Friday the popular greenback gained momentum to the bullish side versus the Japanese yen. The reason behind this is mainly the fact that the US and China are growing confidence regarding the development in their trade talks. Investors seem to support this fact and are also growing their appetite for risk.

Yesterday a Journal report from Wall Street stated that Steven Mnuchin which is the U.S. Treasury Secretary said he is thinking that a possible release of some of the pressure on China by reducing taxes that previously imposed on Chinese imports will be beneficial. But a Treasury spokesman later denied the report. Kumiko Ishikawa, a senior analyst stated that “expectations are that things will go in a positive direction." The dollar index, that contains the Dollar versus 6 major rivals, was mostly even at 96.054 while against the yen, the greenback gained about 0.1% and went to 109.30 yen.

US-China positive expectations lift EU

Today morning the EU stocks went higher following a statement regarding the development in U.S.-China trade talks. The reports gave support to the possibility of an improvement in their ongoing argument.

European Stoxx 600 went up more than half percent on the start of the day.

The Market center is mostly adjusted to global trade progress after the Wall Street Journal reported on Thursday that Steven Mnuchin said that the possibility of easing or some of the tariffs on Chinese imports will be beneficial. The purpose is to promote trade talks and get China's assistance for more improvement.

May needs cross-party talks to succeed.

The UK administration has requested that in order to succeed the need to united and host a cross-party discussion. This is essential in order to find common ground on Theresa May's Brexit plans. May's plans have been "constructive," notwithstanding the opposition of Jeremy Corbyn the Labour leader to join the discussions with the prime minister unless she stops the possible divorce between U.K. and European Union without a settlement. On Wednesday following the success in a parliamentary confidence vote, the Prime Minister stated that she is ready to join with opposition party leaders in a "constructive" talk, and try to resolve the Brexit matter.

US Stocks seen higher

On Friday morning the U.S. stock index futures steered towards to a more bullish tone while traders still considering the reports that the President Donald Trump government may decrease taxes forced on China.

NASDAQ and S&P 500 futures rose as well. The Dow futures got about 78 points, showing a positive start of more than 60 points. Yesterday the stock market closed higher following the Wall Street Journal report that the U.S. could reduce trade taxes versus China.

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