Daily Analysis - 09/07/2019
On Friday pressures between South Korea and Japan escalated while the Japanese prime minister decided to apply new limitations on exports that could punish South Korea’s tech sector. In answer to Japans decision, some Koreans requested a boycott against Japanese goods.
While China and the United States which are the world’s biggest economies remain to fight out their ongoing tariff battle, Asia’s main economic coordinators seem to be staring at their own trade conflict over political disagreements.
Tokyo’s new approach started last Thursday, and Japanese exporters are now asked to apply for permissions to export some specific goods to South Korea. That covers exports of chemicals essentially used for metals manufacturing and pharmaceutical intermediates.
Over the weekend Russia published that it has started the process for delivering the missile system to Turkey.
The transfer of the Russian S-400, a transportable surface-to-air missile system, is related to the latest tensions between the U.S and Turkey.
Turkey which is a NATO ally will get punished if it accepts the Russian missile system. Some of the consequences include economic penalties and not receiving the F-35.
On Tuesday the popular gold dropped while the greenback maintained its position near multi-week tops. The reason behind that is due to the decreased expectations of a U.S. rate reduction, although weaker stock markets paused the golds' losses. U.S. gold futures fell 0.2% to $1,396.49 an ounce. Spot gold also dropped, about 0.1% to $1,393.94 per ounce. The dollar index was floating near a 21-days top while the U.S. Treasury yield curve was flat in more than 30-days.
On Monday the U.S shares fell while the main driver was the decline in Apple that pressed the general technology sector. Traders also held back because they are anticipating an important testimony from Federal Reserve chief later this week. The Nasdaq Composite, fell 0.8% to 8,098.37 while the Dow Jones Industrial Average fell more than 115 points, to 26,806.12. Apple shares dropped more than 2% after an analyst lowered the stock to sell from neutral.
