Xi is music to the markets ears

Xi is music to the market’s ears

US stock markets are flying on President Xi’s conciliatory overtones over tariffs have diffused building trade war tensions Investors took great comfort in his remarks as the S&P500 remained on the ups into the closing bell. In a market starved of good news, Xi’s dialled back trade war rhetoric was music to investor’s ears.

While investors are relishing this moment, trade war issues are not about to leave the political stage any time soon. In fact
President X’s remarks, while conciliatory to tariffs, they were restatements of previous pledges with no new compromises to President Trump.
Oil Markets

Oil prices are towering on the heightened tension in the middle east, and the looming May 12 Iran Nuclear deadline. But the significant counterbalance remains US crude oil production which for the week ending March 30 increased to 10.460 million bpd. Also, The American Petroleum Institute reported a surprise build of 1.758 million barrels which has temporarily taken a bit of wind out of the market sails

However, with all the possible supply disruptors, traders are content to stay long given a likely chance the US will impose sanctions on Iran and will have ” forceful” response to Syria
Gold Markets

Trade war on/trade war off is very much the tale of the tape as Gold prices erased early gains to trade lower on Tuesday after President Xi dialled back trade rhetoric. But with investors positioning for Iran and Syria geopolitical flashpoint to reignite, gold remained and should remain firmly bid on the dip.

Currency Markets

Not sure I have a great deal to add. The revolving door of risk ambulations is exceedingly challenging to anticipate let alone trade.

Japanese Yen

JPY was the worst as USDJPY crept back up to 107.20+ on improved risk sentiment. Nevertheless, still, very much a range trade with traders content to add some small shorts on upticks awaiting the next wave or risk aversion.

The Euro

The markets were adding to EURUSD longs the back of hawkish comments from the ECB’s Nowotny. To be honest, this provided a welcome distraction from all the trade noise!!

The Malaysian Ringgit

$Asia traded lower on the positive regional momentum following CNH gains after President Xi ’s speech, which hit all the right buttons for regional growth.

But the Ringgit remains very much stuck in neutral, and not unexpectedly so given the mild political headwinds. Oil prices continue to be incredibly supportive, but investors appear more content to sit this one out until the election passes.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes