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Trade War Tension may Trigger Recession

  • DAR Wong
  • 25 June 2018

Fundamental Outlook   The U.S. –China trade tension may spread to Europe after Trump administration threatened to raise import tariff on European goods. Bank of England holds monetary policy unchanged. Crude prices recover moderately after OPEC members agree to increase moderate production before oversupply level.

The U.S. building permit for May rose 1.30 million and lowest in past 8 months. Another report on housing starts expanded 1.35 million and highest at 11-year record. Existing home sales fell for a second month at 5.43 million.

The current deficits of Q1 seasons widened to USD124 billion compared to revised USD116 billion in previous quarter. American jobless claims for the week ended 16 June stayed at 218,000 and matched forecast.

Market analysts are worried for possible recession in U.S. economy due to rising trade tension. Trump administration has threatened to raise a 20 percent import tariff on European goods in addition of the recent announcement of USD200 billion tariff on Chinese imports.

The German flash manufacturing index grew 55.9 in June and missed forecast. Another report on Eurozone’s manufacturing index stays consistent at 55.0 reading.

Bank of England holds interest rate at 0.5 percent and asset purchase program remains unchanged at GBP325 billion. Investors are looking at August for next hint in rate hike.

OPEC ended the 2-day meeting in Vienna and agrees to increase production moderately to prevent oversupply. Market analysts speculate the increment at 600,000 – 800,000 barrels per day.  Crude prices have been rising slightly after the meeting.

 

Technical Forecast   USD/JPY has been trading in stagnation last week. The trend is strongly capped under 111.00 level but temporary supported at 109.50 area. This week, we reckon the trend will continue to thread in narrow range while waiting for direction in Dollar Index. Extension beyond the aforementioned range needs risk control.

EUR/USD has shown strong support at 1.1500 level after recent bounce-off. This week, we foresee initial range will be traded in tight movement from 1.1550 – 1.1750 region. In our opinion, the outcome of Turkish election may be a lead factor in directing the Euro movement after the 24 June.

GBP/USD has begun to recover from recent 1.3100 bottom. Market is still weak and strong resistance emerges at 1.3400 area. This week, we foresee range bound trading within this aforementioned region until we see a breakthrough. Traders are staying dormant after central bank refrained from rate hike last week.

 

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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