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.
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