HONG KONG, June 27 — Asian markets rose today as investors brushed off Donald Trump’s latest dig at China and threat to impose more tariffs on the country’s goods if crunch talks with Xi Jinping fail this weekend.
Before setting off for the G20 summit in Japan, the president said in an interview that he had a “Plan B” in case the face-to-face talks show no progress, adding he would “take in billions and billions of dollars a month and we’ll do less and less business with them”.
He said Xi wanted to make a deal as “China’s economy is going down the tubes”.
His remarks on Fox Business Network came soon after Treasury Secretary Steven Mnuchin said the two sides were “90 per cent” of the way to an agreement when talks broke down last month, with the US blaming Beijing for backsliding.
Still, observers said traders were taking the latest developments with a pinch of salt.
“The market is unreactive to these types of headlines given that Trump has continued to adopt a ‘good cop/bad cop’ strategy with... Mnuchin,” said Stephen Innes at Vanguard Markets.
“Instead, market participants are content to wait for Saturday’s meeting to unfold where the proof will be in the pudding.
“A harmonious photo op could go a long way to soothing investors’ concerns at the market open on Monday.”
Oil steps back after rally
However, while there is optimism for an eventual agreement, analysts say they are not expecting anything major to come out of the Osaka meeting.
Oanda senior market analyst Alfonso Esparza said: “The G20 is looking to be a disappointment to investors looking for a blockbuster trade deal to be announced and is now expected to yield a new round of talks between the US and China to be held later this year.”
And Eli Lee, head of investment strategy at Bank of Singapore, added: “Our baseline scenario is that both sides will commit to re-engage in trade negotiations while Trump puts the final round of tariffs on hold for a few months.”
Hong Kong added 1.4 per cent, Shanghai jumped 0.7 per cent and Tokyo ended up 1.2 per cent.
Sydney was 0.4 per cent higher, Singapore rose 0.7 per cent, Seoul put on 0.6 per cent and Taipei jumped 1.1 per cent. Wellington, Mumbai, Manila and Jakarta also rose.
In early trade London gained 0.3 per cent, Paris rose 0.2 per cent and Frankfurt gained 0.7 per cent.
Regional energy firms enjoyed healthy interest after a rally in oil prices yesterday by data showing US inventories had seen their biggest weekly drop since September 2016 owing to a dip in US production and improving exports.
Brent rallied more than 2 per cent and WTI shot up almost 3 per cent on the news, though both edged down today.
Key figures around 0810 GMT
Tokyo - Nikkei 225: UP 1.2 per cent at 21,338.17 (close)
Hong Kong - Hang Seng: UP 1.4 per cent at 28,621.42 (close)
Shanghai - Composite: UP 0.7 per cent at 2,996.79 (close)
London - FTSE 100: UP 0.3 per cent at 7,437.60
Euro/dollar: DOWN at US$1.1360 from US$1.1366 at 2050 GMT
Pound/dollar: DOWN at US$1.2680 from US$1.2685
Dollar/yen: UP at ¥108.04 from 107.78
Bitcoin: DOWN at US$12,355 from US$13,661
West Texas Intermediate: DOWN 21 cents at US$59.17 per barrel
Brent North Sea crude: DOWN 37 cents at US$66.12 per barrel
New York - Dow: FLAT at 26,536.82 (close) — AFP
