A calm period ahead of the October 10-11th high level talks is not happening. Just like we saw in the previous lead up to high-level talks in the past, the White House is trying to increase their negotiating chip count with a fresh threat that could cripple Chinese companies. Risk aversion returned after news broke that the Trump administration is considering weighing limits on US portfolio flows into China.
Delisting Chinese companies would be disastrous for the US economy and we should not see the market take this threat too seriously. The limitation of American pension funds access to Chinese markets would see massive portfolio swings that spells disaster for the tech sector. This threat is harsh reminder that we could very easily see trade talks fall apart next month.
This story pretty came out of nowhere and the timing is terrible. US equities sold off strongly and safe-havens soared as much of Europe has already started their weekends.
Oil
West Texas Intermediate crude has now wiped away all the gains that stemmed from the Saudi oil field attacks. This key oil price gap has now been filled within two weeks and it seems price is tentatively finding support. The recent leg lower with crude prices occurred after Saudi Arabia agreed to a partial cease-fire in Yemen. This four-year war is unlikely to be ending soon and the risk premium is likely to return to crude prices.
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Ed Moya
His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.
Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.
Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.
Ed holds a BA in Economics from Rutgers University.
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