Trade of the Day: Stocks, futures up on trade hopes; US Treasuries weaken; Oil up on OPEC cut fears.
Quote of the Day: “Our 2020 outlook for global banks has changed to negative, from stable, reflecting slowing trend growth, low-interest rates and more volatile operating conditions which will result in increased credit challenges for banks. Trade tension is likely to result in deteriorating loan quality of banks in Asia and the US and there is a risk that further escalation would trigger a financial market sell-off,” Moody’s Investors Service said in its Global Banks outlook for 2020.
Stock of the day: Hua Hong Semiconductor surged 15% to HK$16.80 amid expectations memory chips are poised for a strong 2020, following a brutal downturn in 2019.
Number of the Day: 26 trillion yen. The size of the stimulus package announced by Japanese Prime Minister Shinzo Abe on Thursday. Economists are skeptical about government forecasts it will boost the economy by 1.4%. Markets were cool in their reaction.
Tip of the Day: DBS said one should not write off the possibility of a hung parliament after the UK elections and this could pummel the British pound. “This outcome would pummel GBPUSD below 1.30 to 1.25 again. The return of political paralysis could renew the prospect of a no-deal Brexit on January 31, 2020, and pressure GBPUSD towards 1.20 again.”
Asian markets were firm on Thursday after US President Donald Trump said trade talks with China were going “very well,” ahead of a new round of US tariffs set to kick in on Dec. 15, covering about $156 billion of Chinese imports.
Still, Chinese Commerce Ministry spokesman Gao Feng said at a press conference that if the two sides are to reach a phase one deal, tariffs should be lowered.
“The consensus-based on our recent meetings is that the US and China will agree on a ‘mini’ trade deal, which for now will avoid even higher tariffs, but will keep uncertainty high and will not be enough to improve the global outlook,” said BofA Merrill Lynch strategists in a report. “Such a consensus suggests that if a potential trade deal includes some tariff reductions, this will be a positive market surprise.”
MSCI Asia-Pacific ex-Japan index gained 0.5%, Japan’s Nikkei stock index rose 0.7%, and Hong Kong’s benchmark Hang Seng index jumped 0.6% as healthcare, technology, insurance and consumer sectors boosted the index numbers.
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