Global equity markets rebounded and trade concern eased on Wednesday, as there seems no material moves following President Trump’s $200 billion tariff threat, nor did Beijing come out with detailed plan to retaliate.
This allows market participants to take a deep breath and ‘buy in dips’. US equity market continued to diverge with Technology shares refreshed record whereas the Dow closed lower for a six consecutive day.
Uncertainties surrounding how things are moving on Trump’s trade deal, not only with China but also with other economies, are still out there. This makes yesterday’s rebound look more like a technical one. We need to see constructivemove in trade negotiations between Washington and Beijing so that market confidence can be restored. Things can turn sour if the White House decides to implement more protectionist measures, worsen the trade relationships, and eventually spiral into a full-blown trade war.
The OPEC international seminar is under the spotlight today. Investors and traders awaits for the coalition to come out with final decision on the amount of production increase, which is expected to vary from 600-800k barrels per day. However, plenty of uncertainties remain as the latest news indicated OPEC members haven’t reached a consensus on optimal output growth, and some members have veto any increase at all. Besides OPEC, weekly US DoE Crude Oil inventory report is also a key contributor to oil price movements. This data can be found at CMC’s market calendar as well as news panel.
Central banks and BoE rate decision in focus
Beside trade, a series of macro data and central bank announcements are going to direct market movements today, especially in the forex market. Bank of England (BoE) is going to decide policy rate at 19:00 pm today, which is expected to stay at current level of 0.5%. As for the US market, Business Outlook Survey, weekly Unemployment claim and DoE Natural Gas storage report will set the tone for market open at night.
By Margaret Yang in Singapore
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