US-China uncertainty returns

Daily Analysis - 09/10/2019

Trump’s administration blacklists 28 Chinese companies

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Uncertainty and fears are growing around the trade war between the US and China because of the new US restrictions toward Chinese executives and corporations. Those restrictions are not providing anything and don't “set a good tone” for the expected high-level trade discussion, according to a former American ambassador to China. On Tuesday the Trump government set visa limitations upon Chinese executives because it “believed" to be liable for, or complicit in, the arrest and abuse of” Muslim minorities in China’s northwestern Xinjiang area. That was after the move to blacklist 28 Chinese companies claimed to be included in the monitoring and detention of minority groups in China. Both reports issued just days before a high-level trade gathering that is arranged to take place in Washington on Thursday and Friday.

Trade war uncertainty supports Gold


On Wednesday the famous safe haven Gold remained strong due to uncertainty created by the new restrictions that Trump administration set on Chinese officials and companies. Fading optimism towards the developments in US-China trade discussions undermined the risk appetite, with investors following closely for evidence on monetary easing by the US Federal Reserve. Spot gold was little exchanged at $1,505.45 per ounce but held strong over $1,500 after bouncing as much as 1% in the previous session. US gold futures increased 0.5% to $1,511.01 per ounce.

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Oil is falling for the 3rd day


On Wednesday Oil continued to fall for a third day while pressures escalated between the United States and China just days before the much-anticipated trade discussions. That fact increased risks and uncertainties regarding global economic growth and oil demand.

U.S. industry data showing a bigger-than-expected increase in stocks at the world’s biggest oil producer also discouraged prices from growing. Brent crude futures lost 24 cents to $58.01 a barrel while US West Texas Intermediate crude fell 24 cents to $52.38.

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Greenback is steady for now


On Wednesday the famous greenback remained steady while expectations for a breakthrough in US-China trade conversations faded, making investors run for cover into less dangerous assets. At the same time, the pound floundered near 30 day lows on expanding uncertainty regarding Brexit. The US command of visa limitations on Chinese officials, and the blacklisting of Chinese companies, covering the treatment of Muslim minorities have set a drawback over trade negotiations programmed in Washington for the remainder of the week.

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