US-China new tensions

Daily Analysis - 29/01/2019

US officially requested the extradition of Huawei CFO

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On Tuesday Asia Equities moved deeper due to increased fears for a new decrease in the Chinese economy. These resumed fears created uncertainties all over again and hurt trader’s sentiment.

The new tensions between the two economic giants came from the fact that the U.S. Department of Justice on Monday listed criminal charges to formally demand the extradition of the CFO of the Chinese telecommunications Huawei Meng Wanzhou. Hong Kong's Hang Seng index lost more than 0.5% while the Shanghai Composite sank 0.5% and the Shenzhen component moved down more than 0.8%. The Shenzhen composite also fell 1.366 percent.

US sanctions on Venezuela


Last Wednesday, Venezuela's opposition leader Juan Guaido was pushed into a political emergency.  The reason was that he proclaimed himself the legitimate interim leader of the country, urging world governments to acknowledge him as Venezuela's interim president. This drove Maduro to cut connections with the U.S. and command all American diplomatic staff to leave the country in 72 hours. Now the U.S. penalties on Venezuela's oil firm will make the country to exchange its energy stocks with big discounts to buyers such as India and China.

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Huawei case push Gold higher


Today Gold scored a more than a half of a year top while traders avoid riskier assets due to fears on the tensions between U.S and China. Gold futures were steady at $1,302.69 per ounce while Spot gold climbed to its highest since last year, at about $1,304.50 and was strong at $1,303.60 per ounce. In the Meantime, the FED policy conference starts later in the day. The central bank is supposed to leave interest rates unchanged.

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The US penalties against Venezuela gave Oil Momentum


After the U.S on Tuesday forced sanctions on Venezuelan PDVSA a state-owned oil firm in a move initiated to critically restrict the OPEC member's crude exports to the United States.

International Brent crude oil futures were at $60.00 per barrel, about 0.2 percent. The U.S. West Texas Intermediate (WTI) crude futures were at $52.10 per barrel, from their last close. The U.S. Treasury said on Monday "As a result of today's action, all property and interests of PDVSA subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.”

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