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China Retaliates Import Tariff on U.S. Products

  • DAR Wong
  • 9 April 2018

Fundamental Outlook   The U.S. weekly claims grows to highest in 12 weeks. Non-farm payroll grows 103,000 below forecast and shocked market. China raises import tariff on American goods as retaliation. U.K. sees a slowdown in building and services that could have been affected from BREXIT threat.

The U.S. ISM manufacturing index grew 59.3 in March and below forecast. Another separate report by the same institution on services index rose 58.8 in March and matched consensus.

The U.S. weekly claims increased to 242,000 for the week ended 31 March. The U.S. non-farm payroll added only 103,000 in March and surprised market that compared to revised 326,000 in previous month.  Unemployment rate at 4.1 percent.

China’s Caixin manufacturing index maintained in growth at 51.0 reading in March, above 50.0 benchmark. Another report on Caixin services index rose 52.3 in March and lowest record in 4 months.

China announces the retaliation of increasing import tariff on 106 American products worth USD50 billion. President Trump immediately responds by adding another USD100 billion tax tariff on Chinese imports. Trade war has erupted between U.S. and China that worries many American farmers for their forthcoming production and sales.   

Japan’s Tankan manufacturing index for Q1 seasons rose to 24 reading, below forecast and compared to 26 reading in Q4 seasons. Consumer spending grew 0.1 percent in February on year basis and lower than previous month.

Eurozone consumer prices gained 1.4 percent in March on year basis and stagnated. Excluding food and energies, core prices grew 1.0 percent from a year ago and below forecast.

U.K. manufacturing index grew 55.1 in March and in-line with expectation. Markit reports British construction expanded at 47.0 that is lowest in 20-month record, signaling a slowdown in building industry. Another separate report on services index expanded at 51.7 and lowest in 20-month record.  

 

Technical Forecast   USD/JPY traded in small recovery last week but was resisted at 107.40 area. The market may be prone bias to fall this week while testing the 105.50 support again. Range is expected to be contained in the aforementioned range until the trend breaks beyond in either direction.

EUS/USD has been trading in tight range from 1.2200 to 1.2330 region. The market will depend on Dollar strength to determine the next directional headway. This week, we forecast a higher probability in climbing higher to 1.2450 level provided the support at 1.2200 must be guarded well. Abandon your long-view if this support is compromised.

GBP/USD has been constricted from 1.3950 – 1.4200 range. The support is very crucial since breaking beneath here will initiate new selling trend. This week, we prefer to observe and adopt a cautious risk control since the trend may travel in either direction.

 

Disclaimer: This article is written for general information only. No liability by the writer, publisher or any third party involved in the distribution of this work.

DAR Wong is a registered fund manager in Singapore with 27 years of global trading experiences. You may reach him at dar@pwforex.com


About the Author
DAR Wong (Singapore)
An international speaker with 27 years of trading experience in the global financial markets, DAR is a Market Master and author of “Living Daylight in Stock Market: Monetizing Your Profits in 8 Days”.

DAR Wong is an active market trader, registered fund manager, educator and author.He began his career in 1989 as an institutional Futures trader with Bank of America. DAR Wong specializes in trading global derivatives and financial markets. He has 26 years of experience accumulated through tenure with Bankers Trust, Barclays Bank, Citigroup (Smith Barney Shearson Inc) and as an independent trader.

DAR is the author of “8 Ways to Invest in China’s Emerging Market” and contributes frequently to regional media, including financial TV/Radio programmes, newspapers and magazines for professional traders and active investors.

He is a popular and sought after international speaker who has presented to financial professionals and investors throughout the region including Singapore, Malaysia, Indonesia, Thailand, Hong Kong, China, Cambodia, Myanmar, Philippines, Sri Lanka, India, South Korea, Laos, Vietnam, United Kingdom and Middle East (UAE).

DAR is registered with NASD (now known as FINRA) series 3 and 5 as approved by National Futures Association (NFA) of USA and holds a current portfolio as Fund Strategist and Advisor with Dektos Investment registered with Monetary Authority of Singapore.

DAR is profiled as “One of the most successful traders – Market Masters” in Brent Penfold’s bestselling book “The Universal Principles of Successful Trading “. In January 2015, DAR was honored with Outstanding Award for International Financial Market Analysis granted by ASEAN Commerce (Thailand).

DAR is the author of "8 Waysto Invest in China's Emerging Market" and contributes frequently to regional media, including financial TV/Radio programmes, newspapers and magazines for professional tradersand active investors.1

He is a popular and sought after international speaker who has presented to financialprofessionals and inverstors throughout the region including Singapore, Malaysia, Indonesia, Thailand, Hong Kong, China,Cambodia, Myanmar, Philippines, Sri Lanka, India, South Korea, Laos, Vietnam, United Kingdom and Middle East(UAE).2


Year
2003 - Set up ASPRI to provide hedging advisory for corporate clients and training for financial professionals
2009 - Released first book “8 Ways to Invest in China’s Emerging Market”
2010 - Profiled as “one of the most successful traders – Market Masters” in Brent Penfold’s bestselling book “The Universal Principles of Successful Trading” along with Larry Williams, Andrea Unger, Michael Cook, and Daryl Guppy etc
2011 - Received “Spirit of Enterprise”awarded by Singapore Management University in Singapore
2012 - Honored with Individual Diamond Career (Thailand) awardedby Royal Privy Council of Kingdom of Thailand
2013 - Appointed Vice Chairman of ASEAN-China Commerce Association and led a delegationtothe annual China-Asean Expo in Guangxi Province, China
2014 - Fund Manager cum Director in Dektos Investment Corporation registered with Monetary Authority of Singapore
2015 - Released new book “Living Daylight in Stock Market - Monetizing Your Profits in 8 Days” in January
2015 - Honored with Outstanding Award in International Financial Market Analysis awarded by ASEAN Commerce (Thailand)
2016 - Honored with Medal of Integrity by Royal Councilin Palace of Palembng, Indonesia

References

1.TV programs on ChannelNewsAsia (Singapore);Radio on 95.8 Capital (Singapore); Newspapers such as The Borneo Post (Malaysia), 资汇报 (Malaysia); Regional financial magazines such as The Analyst (India), 东盟商界(ASEAN, China), 资本杂志 (Malaysia).

2.Spoke at events for CME Group, Euronext LIFFE, Tokyo Commodity Exchange, Singapore Exchange, Korea Exchange, Bursa Malaysia, Thailand Futures Exchange, Jakarta Futures Exchange, Indonesia Commodity and Derivatives Exchange, Tokyo Commodity Exchange, Interactive Brokers, Xinhu Futures, Hangzhou Money Fair, China (Shenzhen) International Finance Expo, China (Guangzhou) International Finance Expo, Euromoney, CIMB, Maybank, RHB, UOB Bank, Asia Trader & Investor Convention, Global Rubber Conference, International Rubber Conference, Malaysia Rubber Board, International Rubber Research and Development Board,Malaysia Ministry of Agriculture, Rubber Industry Smallholders Development Authority, Vietnam Rubber Association, Cambodian Rubber Association, Bureau of Agriculture Research Philippines, Myanmar Rubber Planters & Producers Association etc.


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