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Asian Markets Quiet Despite a Trade Deal

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Asian markets were rather muted throughout the region on Monday. Traders were digesting fresh economic data out of China that showed that, for November, retail sales rose more than expected.

Asian Traders were also on the fence concerning the recent trade deal between the United States and China. The U.S. has announced that they are ready to sign the deal by the first week in January but China has been quiet. There are also a lack of details surrounding the “phase one” trade deal.

In Japan, the Asian benchmark, the Nikkei 225 was flat as was the broader Topix index, in Tokyo. On Friday, these markets saw a nice rally. Auto shares were under pressure and lost some of the gains seen last week after the elections in the United Kingdom eased concerns surrounding Brexit.

In South Korea, shares were also muted and trading around the flat line.

The Shanghai composite was trading a little higher by lunch time. The Shenzhen composite added 0.82 percent and the Shenzhen component was up 0.8 percent.

In Hong Kong, the Hang Seng index was down about 0.3 percent.

Economic data, out of China, for the month of November, showed that industrial production gained 6.2 percent annually. Traders had expected this number to print at five percent.

Retail sales rose eight percent, which was better than the expected print of 7.6 percent.

Asian Traders wait on Trade Agreement Details and Global PMI Data Due Later Today

China and the United States have reached a preliminary trade agreement. The United States will not initiate any new tariffs. China has reciprocated, and will also hold off on punitive tariffs.

The U.S. will also reduce some tariffs in exchange for China buying American agricultural products and other goods.

The United States says that this “phase one” trade agreement should be signed by the first week in January.

This trade deal, which has been highly anticipated, could ease trade tensions between the two nations. Still, traders are waiting on further details. A date for signing this trade pact is also awaited.  

There are a number of events on the economic calendar. These events should cause volatility in the financial markets.

There is an avalanche of flash manufacturing and services purchasing manager’s indices (PMIs) out of the Eurozone, including Germany and France. The United Kingdom and the United States will also release flash PMI data

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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