Equities suffer after the US ban some Chinese officials entering the US

Published date: 09/10/2019
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It was a mixed day in equities markets yesterday as Fed Chair Powell committed to increasing the Fed's balance sheet and said the central bank may resume treasury purchases. Almost immediately after the US confirmed they were set to ban visas for some Chinese officials who are tied to the abuse of some Muslims in their own nation. This has equities sell-off as it was just before the trade talks kick in today.  Also the probability of a 25bp cut at the Fed meeting later this month rose from 64 to 74% but obviously this would be risk positive. Over in the Asia Pac area, the Nikkei 225 (-0.61%) and the ASX (-0.71%) both fell to confirm the bearish tone.

In FX markets GBP/USD was the biggest loser as the EU confirmed that Boris Johnson's new deal will not be good enough to pass through. Today the UK PM is set to have talks with his Irish counterpart in a bid to reignite his deal. 

Amid all the turmoil in equities, gold rallied to move above $1500/oz again. This morning the precious metal trades 0.14% higher at $1507/oz but I think the market is waiting for the outcome of the trade talks before deciding on its longer-term direction. 

Predictably copper struggled yesterday off the back of the trade story. The industrial metal is now back under $2.60/lb. This morning the base metal has retraced slightly and is 0.25% higher at $2.56/lb.

Oil struggled overnight after a build was recorded in the API inventory data. Later in the session, we have the DoE inventory results for this week and any build will confirm the bearish trend.

Today we are on the lookout for US Jolts jobs data, DoE's. FOMC meeting minutes and Fed's Powell speaks again.


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