Dollar index retraced back to the 94.8 area overnight as US government proposed a new round of trade talks with Beijing, an attempt to avoid imposing huge amount of tariffs on Chinese imports as threatened by President Trump last week.

The outcome of a total trade war between US and China is not desirable for both sides. Renewed hope on trade negotiations lifted commodity currencies like AUD and CAD. The offshore renminbi also climbed to 6.84 area from 6.88 a day ago.

Positive sentiments could alleviate the sell-off in emerging markets, most of which were hammered by trade uncertainties and currency chaos in Turkey, Argentina and Indonesia over the past weeks. The trade talk between Washington and Beijing, if agreed to by the Chinese counterparty, will probably lead to a technical rebound in Asian equities, especially for those iPhone part manufacturers who suffered the most from the new tariff threat recently.

Mixed reactions were seen in the US equity market, with Technology shares mostly falling post Apple’s launch of its new iPhone series. The new iPhone X series costs from USD$749 to $1,099, higher than the price of its predecessors. Higher unit price allowed Apple to maintain revenue growth despite slower increase in unit volume last year. Apple also launched its Apple Watch with medical grade electric heart rate sensor at the price of US$499, $100 more than the old version. Apple’s price fell 1.24% to $221 last night.

Sterling stays firm ahead of BoE’s interest rate decision tonight, as the Brexit optimism underpinned trade uncertainties. Market expects the central bank to stay put on key rate and asset purchasing target, but a tone set by policy maker could still trigger volatility of pound pairs. Technically, GBP/USD may face some resistance at around 1.304 area, which was the previous high. The near-term trend, however, has turned bullish as its SuperTrend (10,2) and 10-Day SMA have both flipped upward. The next resistance levels can be found at 1.308 (78.6%), 1.316 (100% and 1.326 (127.2%) Fibonacci Extensions.

Crude oil prices surged to the highest level in over two months as US east coast is embracing probably the strongest Hurricane in 60 years, driving up demand for petroleum storage and bringing up the likelihood of pipeline disruption. Besides, the US sanctions squeezed Iranian crude exports, slashing global crude supply is another important driver of oil prices over the past week. On the inventory side, the US DoE crude inventory has been falling for three consecutive weeks, with declining amount more than market’s expectation.

Crude Oil Brent is trading at around US$79.2 area and is facing strong resistance at psychological resistance level of US$80.0 area. Technically it is riding a strong uptrend since mid-Aug, with both SuperTrend (10,2) and 10-Day SMA both sloped upward.

Singapore’s oil & gas shares are riding the tailwind of strong crude prices, outperforming the benchmark index over the last three trading sessions

Crude Oil Brent - Cash

By Margaret Yang in Singapore

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