While the latest Chinese trade data published overnight showed what Saxo Bank Head of FX Strategy John Hardy terms a "respectable surplus" with exports up 6% year-on-year, the release is hardly a sign that the Sino-US trade war is a paper tiger.
"The situation in China is far from stable and we expect further escalation of the trade war," says Saxo Bank Head of Equity Strategy Peter Garnry, adding that Chinese stocks fell another 1.6% overnight after rallying Tuesday.
"The Chinese appetite for commodities has not yet been meaningfully impacted by the trade war," says Saxo commodities head Ole Hansen, but like his SaxoStrats counterparts, Hansen remains of the view that the tariff-centred dispute will show up in later data releases.
In FX overnight, EURUSD and USDCAD posted bounces while EURGBP hit a new 2018 high on Brexit fears.
In commodities, Hansen points to the US Energy Information Administration lowering its US production growth forecasts for both 2018 and 2019 due to bottleneck issues, while Peter Garnry reports that Tesla shares are up 11% on a new secured funding plan (contingent on shareholder approval) announced by Elon Musk that would take the company private at a bill of $420/share.
For more on equities, forex, and commodities, as well as China, Tesla, and trade, watch today's Morning Call in full.
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.