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Daily Markets Broadcast 2019-05-10

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Daily Markets Broadcast


Wall Street pressured as tariff deadline nears

US indices extended recent declines, as uncertainty surrounding today’s tariff deadline took hold. Will Trump pull the trigger and raise tariffs from 10% to 25% on Chinese goods? China shares have suffered more than Wall Street under the threat.

US30USD Daily Chart

Source: OANDA fxTrade

  • The US30 index fell to the lowest level since March 27 as a lack of news on the trade negotiation front exacerbated weakness from the tariff deadline
  • The decline stalled at the 23.6% Fibonacci retracement of the December-May rally at 25,486. The index rebounded into the close but still ended in the red
  • US consumer prices probably rose at a marginally faster pace of 2.1% y/y in April, from +1.9% in March. Speeches from Fed’s Brainard and Bostic are scheduled, but will no doubt be overshadowed by developments after the tariff deadline.

DE30EUR Daily Chart

Source: OANDA fxTrade

  • The Germany30 index fell yesterday, touching the lowest in almost a month as pressure on Wall Street intensified
  • The index is still holding above the 23.6% Fibonacci retracement of the rally since December at 11,938
  • Germany’s March trade data are due today and are expected to show a narrowing of the trade surplus to EUR18.2 billion from EUR18.7 billion. ECB’s Lautenschlaeger is scheduled to speak.

CN50USD Daily Chart

Source: OANDA fxTrade

  • The China50 index fell for a fourth straight day yesterday amid fears of a trade war escalation after the tariff deadline tonight
  • The index dropped to a two-month low but halted the decline near the convergence area of the 100-day moving average at 12,202 and the 50% retracement level of the 2019 rally at 12,198
  • China publishes new loans data for April today with a bumper total of 1.2 trillion yuan ($175 billion) expected. This would bring the year-to-date total to more than 7 trillion yuan ($1.02 trillion), a serious injection of liquidity into the corporate world.

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