Asia Equity markets
For the most part, regional equity markets are performing very well after the Feds refrained from delivering a hawkish surprise while sentiment was further bolstered after President Trump indicated he was calling General Secretary Xi tomorrow to discuss trade.
But HSBC HK has thrown a spanner into works by raising prime lending rates most likely due to the prospect of higher funding costs after the PBOC announced they would be tapping into local HK money markets via HKMA to issue T-bills. HSI is giving back earlier gains, as this will put property markets under the gun given that the city’s highly leveraged property market are base on floating interest rate mortgages.
President Trump is not a happy camper!
Not happy with the Fed
Not happy with OPEC
Not happy with Canada
Not happy with China
The Feds
The FOMC is committed to maintaining stability and refrained from adjusting policy. “We’ve been given a critical job to do on behalf of the American people,” Powell said. “My colleagues and I are focused, exclusively, on carrying out that mission.” As such, the FOMC remains entirely independent of any domestic political persuasion
Oil
Energy Secretary Rick Perry, a global ambassador for the American oil and gas industry, has quickly snuffed out any idea about tapping into SPR, causing an unwinding of any bearish sentiment the markets had around that notion. And Asia oil traders are singularly focusing on Iran sanction and the impending supply crunch.
NAFTA
Not sure if there’s just a bunch of bad actors at play but indeed the upcoming Quebec provincial election falling on Oct 1, and with the Provincial Liberals pulling ahead in the polls every so slightly, it’s debatable how much of a rush the Federal Liberals will be to ink a deal before month end. Especially given the political fallout from any concessions around the dairy industry, as the bulk of Canada’s Milk industry is based in Quebec.
China
Some light at the end of the tunnel if President Trump follows through with his pledge to call President Xi tomorrow to discuss trade. Indeed, mainlands measured response to the US whacking China with 200 billion in tariffs this week is likely being viewed in a favourable light by the US administration.
