President Trump is not a happy camper

Asia Equity markets 

For the most part, regional equity markets are performing very well after the Feds refrained from delivering a hawkish surprise while sentiment was further bolstered after President Trump indicated he was calling General Secretary Xi tomorrow to discuss trade.

But HSBC HK has thrown a spanner into works by raising prime lending rates most likely due to Fed rate hike coupled with the prospect of higher funding costs after the PBOC announced they would be tapping into local HK money markets via HKMA to issue T-bills. HSI is giving back earlier gains, as this will put property markets under the gun given that the city’s highly leveraged property market are base on floating interest rate mortgages.

President Trump is not a happy camper!

Not happy with the Fed
Not happy with OPEC
Not happy with Canada
Not happy with China

The Feds 

The FOMC is committed to maintaining stability and refrained from adjusting policy. “We’ve been given a critical job to do on behalf of the American people,” Powell said. “My colleagues and I are focused, exclusively, on carrying out that mission.” As such, the FOMC remains entirely independent of any domestic political persuasion

Oil

Energy Secretary Rick Perry, a global ambassador for the American oil and gas industry, has quickly snuffed out any idea about tapping into SPR, causing an unwinding of any bearish sentiment the markets had around that notion. And Asia oil traders are singularly focusing on Iran sanction and the impending supply crunch.

NAFTA
Not sure if there’s just a bunch of bad actors at play but indeed the upcoming Quebec provincial election falling on Oct 1, and with the Provincial Liberals pulling ahead in the polls every so slightly, it’s debatable how much of a rush the Federal Liberals will be to ink a deal before month end. Especially given the political fallout from any concessions around the dairy industry, as the bulk of Canada’s Milk industry is based in Quebec.

China
Some light at the end of the tunnel if President Trump follows through with his pledge to call President Xi tomorrow to discuss trade. Indeed, mainlands measured response to the US whacking China with 200 billion in tariffs this week is likely being viewed in a favourable light by the US administration.

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
Stephen Innes

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