Asian markets waver to start key week for trade, US data
HONG KONG : Asian markets mostly rose today as investors eyed a week dominated by speculation about US inflation data and a prolonged pause for Washington's tariffs on China.
Observers expect Donald Trump to announce an extension of a trade war truce reached with China last month, ahead of a 90-day deadline due to expire tomorrow.
Meanwhile, a key US consumer price index report is set up for tomorrow and could shape future policy decisions by the Federal Reserve, which has come under increasing pressure from the president to cut rates.
Investors have ramped up their bets on the central bank lowering borrowing costs at its next meeting in September, following a series of reports – particularly on jobs – indicating the world's number one economy was slowing.
Also in view is a high-stakes summit between Trump and Russian counterpart Vladimir Putin on Friday in Alaska, which could pave the way for a deal to resolve the Ukraine war that involves an easing of tough sanctions on Moscow.
In early trade, Hong Kong, Shanghai, Sydney, Seoul, Wellington, Taipei and Jakarta all rose though there were losses in Singapore and Manila. Tokyo was closed for a public holiday.
With tomorrow's US-China tariff truce deadline looming, investors are bullish about the prospects of another extension.
'The market has fully subscribed to the high probability of the tariff truce being rolled over for another 90 days' said Chris Weston of Pepperstone.
'As such, unless diplomatic talks fully break down, news of extension shouldn't move markets too intently,' he added.
Gold futures edged down after hitting a record high Friday following reports of an unexpected tariff on the precious metal.
Despite protracted uncertainty about trade, investors remain optimistic about artificial intelligence (AI) – an area of fierce competition between Beijing and Washington.
Reports today said that US chip giants Nvidia and Advanced Micro Devices (AMD) had agreed to pay Washington 15% of their revenue from selling AI chips to China.
Investors are betting that AI will transform the global economy, and last month Nvidia – the world's leading semiconductor producer – became the first company ever to hit US$4 trillion in market value.
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