07.11.2019 – Daily Report. Finally China announces execution: The otherwise rather taciturn trade ministry in Beijing announces that customs duties on both sides are to be gradually dismantled – with which phase 1 can be signed. The breakthrough pushes US futures north. Which is why we can look forward to new records in floor trading. Once again the DAX climbs an annual summit.
US Futures and DAX pull up
The stock market in global trading celebrated the news from Beijing: the contract on the Dow Jones climbed by 135 points or half a percent, the future on the S&P 500 by 0.4 percent. The DAX climbed to 13,301 points, with the leading German index recently rising by 0.8 percent to 13,286 points. This means that the all-time high of 13,596 points is no longer too far away.
German industry weakens
The fact that German industry cut back production in September receded into the background. According to a report by the Federal Statistical Office, total production was 0.6 percent below the previous month’s level. Compared to the same month last year, production fell by a harsh 4.3 percent. All data can be found here: Market Mover
China announces breakthrough
The topic of the day was the customs dispute. According to the Chinese government, Washington and Beijing have agreed on a gradual reduction of the punitive tariffs imposed on each other. This agreement will be part of a first partial agreement, Gao Feng, spokesman of the Ministry of Commerce. The extent of the tariff reduction depends on the concrete content of the agreement, Gao added. The proportions of the cap would have to be the same on both sides. The agreement is to be signed within the next few weeks.
Oil prices also rising
The happy customer also pushed the oil market – the conclusion of a trade deal would increase the chances of the global economy picking up. WTI climbed 1.4 percent to 57.11 dollars, and Brent also rose 1.4 percent to 62.62 dollars. A factlet that speaks for an oil glut receded into the background. In September this year, for the first time in three decades, the USA exported more crude oil than it imported, as Oilprice.com reported. This is the first oil surplus since 1978.
Asia has not yet reacted
Customs news came too late for Asian trade. The Nikkei gained 0.1 percent to 23,330 points in Tokyo even before the announcement. The CSI-300 climbed 0.2 percent to 3,992 points. However, the renminbi strengthened against the dollar to 6.9879 points.
What a back and forth. Only yesterday Reuters had cooled the anticipation. According to this, a meeting between Presidents Donald Trump and Xi Jinping could be postponed until December, which would delay the conclusion of an interim deal. White House spokesman Judd Deere said there had been progress on the text of the Phase 1 agreement, which would be announced as soon as there was agreement on where to sign it.
Wait and see in New York
Accordingly, the Wall Street stock market had held back on Wednesday. The Dow Jones Industrial closed unchanged at 27,493 points. The S&P 500 recorded a minimal gain of 0.1 percent to 3,077 positions. The Nasdaq 100 lost 0.2 percent to 8,196 points.
The buying mood had also cooled down with the head of the Chicago Fed, Charles Evans. In an interview with Yahoo Finance, he said that the US economy probably did not need another interest rate hike, as it was proving to be quite robust.
This is what the day brings
The Pound Sterling will come into focus on Thursday as the Bank of England’s interest rate decision is scheduled for 1pm.
At 2:30pm the weekly first applications for unemployment assistance follow in the USA.
The Bernstein Bank wishes successful trades!
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