Trade War Resurges in More Conflict | DZHI - DZH International 
logo

Trade War Resurges in More Conflict

  • DAR Wong
  • 3 June 2019

Fundamental Outlook   The U.S. GDP grew 3.1 percent in Q1 season. President trump slaps a 5 percent tariff on Mexican imports as a protest action to illegal immigration. The U.S. 10Y Bond yield falls to 19-month low at 2.133 percent.

Last week, President Trump concluded his 4-day trip to Japan and mentioned of a possible deal trade to be finalized in August. Japan’s official downplays the deal and comments Trump has been too eager to achieve a quick progress in negotiation.

China reports the manufacturing index slides in May to 49.4 against the forecast and after it climbed 50.1 in April. On the other hand, President Trump voices China is starting to face economic impact due to effects from trade war. Meanwhile, China importers have halted the purchase of soybeans from U.S. producers.

China has expressed clearly it would not give in to U.S. deal for changing its state-run economy. Besides, China is not prepared to surrender the proprietary technology that U.S. has accused of being stealing from American corporations.

China’s state run media Xinhua agency comments America for bullying other nations will land at lonely state eventually. Former PBoC Governor Dai Xainglong also says the enlargement of trade war will cause global economy to decline, and erupt to another financial crisis.

Italy is on verge of a showdown with EU of ballooning debt and budget deficits. Italy’s deputy PM Matteo Salvini says Rome could be slapped with EUR3 billion fine by EU regulators of failure to control sovereign debt.

Technical Forecast   USD/JPY fell on last Friday after Dollar waned. The trend has projected a bearish direction in June and might continue to dip further this week. Technically, market may consolidate from 107.50 – 109.00 range but will slide eventually in near future. Abandon your short-view in case of recovery above 109.00 level.

EUR/USD has exhibited strong support at 1.1120 level and tend to recovery this week. We forecast the trend will reach 1.1250 target for time being and consolidate for a while. Uptrend has been identified in June for crossing above 1.1250 level so long as the trend does not sink below 1.1120 support.

GBP/USD has been trading from 1.2550 – 1.2750 range while prone bias to fall. However, we foresee some buying interest will return to market this week due to the resignation of PM Theresa May. A potential new Prime Minister will replace her and who is a hardcore supporter of BREXIT without any deal needed. Technically, the trend is possible to move in either directional headway once it breaks beyond the aforementioned range.

Gold prices have begun to surge above USD1300 /oz after the Dollar fell. This week, we reckon the trend will be well supported at USD1295 /oz and continue to rise further. Potential range might extend up to USD1325 /oz region before some profit-taking emerges. The recovery has been well predicted by us over past weeks when the opportunity rose in fishing the bottom below USD1280 /oz level.

WTI Crude prices fell last week due to renewed worries of trade war. This week, we foresee the bears will take the trend lower at USD51 /barrel until bargain-hunting emerges. Overall range is expected to move from USD51 – USD56 /barrel. Take note that the potential Dollar fall may benefit the precious metal demand but not the Crude prices for the time being.

Silver prices also has begun to recover but at slower pace after Gold prices. This week, we predict the range will be prone bias to rise but limited to USD14.40 – USD14.80 /oz range. Sentiment is almost unchanged from last week’s analysis.

Crude Palm Oil (FCPO) Futures on Bursa Derivatives traded higher last week as Poland supports the Malaysia Palm Oil as biofuels against EU. August19 Futures closed at RM2071 /MT on Friday. This week, we forecast the trend will be prone to rise higher while contain from RM2040 – 2120 /MT range.  In our opinion, FCPO may begin to head for a mid-term recovery for coming months.

 

DAR Wong has 30 years of trading and hedging experiences in global financial markets. The opinion is solely at his own.  He can be reached 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.