Stocks, currencies barely changed, Bitcoin makes another jump

Summary:

  • Market sentiment little changed following the weekend despite fresh comments regarding US-China trade talks as well as possible cuts of a reserve requirement rate in China
  • Bitcoin rises almost 6% after having the excellent last week
  • Some minor macroeconomic data from Asian economies

Steady risk sentiment

The beginning of Monday’s trading has not brought any price moves of note either in equities or currencies. Looking at stock markets in Asia one may notice that the Japanese NIKKEI (JAP225) is trading 0.15% down, the Shanghai Composite is also 0.3% down while the Hang Seng (CHNComp) is rising 0.6% at the time of preparing this analysis. There were some upbeat revelations over the weekend which could have buoyed risk sentiment at the start of the new week but they did not. First of all, we got some remarks on the ongoing US-China trade negotiations from Larry Kudlow, Trump’s economic adviser. He said that the US and China were “closer and closer” to a trade deal. Kudlow added that both sides made great progress on the intellectual property theft as well as on the forced transfer of technology. Although these comments may be reassuring for investors to some extent, there was nothing more we had already known. Having in mind that some sticking points still remain, one may suppose that there is too early to talk about any real breakthrough - this could be scrapping tariffs by both sides. Another upbeat news came from China, where the PBoC is reportedly considering another cut of a reserve requirement rate (RRR). This move is to be aimed at injecting liquidity at a time when as much as 367 billion yuan of medium-term loans are set to mature in coming weeks. This is not the first time the Chinese central bank resorts to such a step to boost liquidity conditions. China cuts its RRR by 250 bps throughout the last year.

The Dow Jones (US30) closed on Friday above its recent highs suggesting that bulls could take a stab at breaking the all-time highs placed around 26800 points. Source: xStation5

Bitcoin moves higher

The sole market of note (if we look beyond traditional assets) is Bitcoin being up more than 5% at the time of writing. There have been no reports standing behind such an upward move so far. However, it needs to be said that the most famous cryptocurrency had a great last week with the price climbing more than $1000. The pure technical outlook suggests that the price could be en route to its major resistance placed in the vicinity of $6100. The daily chart also shows that the price is currently struggling with the upper limit of the bullish channel which could also constitute a hurdle for buyers in the nearest future. Therefore, after such a huge upward move we have had recently, one cannot rule out some profit-taking.

Bitcoin is rising more than 5% in early European trading being the largest mover in the morning. Source: xStation5

In the other news:

  • Japanese current account balance for February was 2677 billion JPY compared to the consensus of a 2633 billion JPY surplus; a trade balance was 489 billion JPY vs. 591 billion JPY expected

  • ANZ’s survey showed Australian job vacancies in March fell 1.7% MoM after falling 0.8% MoM in February

  • BoJ’s Kuroda said the BoJ would keep interest rates at current very low levels for an extended period, the monetary base is to be expanding until inflation stably exceeded 2%

  • German trade surplus in February was 17.9 billion EUR vs. 16 billion EUR expected, exports fell 1.3% MoM vs. a 0.5% MoM fall expected while imports declined 1.6% MoM vs. a 0.6% MoM decrease expected

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