Tools for Traders Top Movers | Heat Map | Pivot Point | Pivot Meters | Action Bias | Volatility Charts Action Insight Daily Report: Dollar Lower as Battle 1, US-China Trade War Starts, But Other Markets Shrug Off The US finally announced the list Chinese products to be tariffed in its Section 301 actions. China responded with strongly worded statement. But so far, market reactions are muted. After limited volatility, both Japan Nikkei and Hong Kong HSI are trading nearly flat at the time of writing. The China SSE Composite index is actually up 0.8%. Gold is trading inside recently established range, gyrating around 1335. While the 301 tariffs are seen as some as the cannons of the first battle of the US-China trade war, it seems that the markets are not expecting a escalation. Instead, the US and China would bring things back to the table for negotiation. But we'd like to emphasize that the situation will totally change depending on the response from China. Crude Oil Prices Supported by Inventory Draw and Russia's Pledge to Fully Comply with Output Cut Crude oil prices climbed higher for the second consecutive day as a report showing unexpected expected decline in US inventory. Meanwhile, Russia pledged that it would fully comply with the output cut deal this month. However, caution is advised over the promise as Russian oil output has reached the highest level in 11 months in March. Currently trading at US$62.29/bbl, the front-month WTI contract ended that at US$63.51/bbl, up +0.79% on Tuesday. Meanwhile, the Brent contract gained +0.71% and settled at US$62.12/bbl for the day. China's First Renminbi Crude Oil Futures Unlikely Accelerates Currency Internationalization On March 26, China launched its, and also the world's, first renminbi-denominated crude oil futures. The debut appeared successful with 20M barrels of oil changed hands on average in each of the first two trading days. This represents 3% of combined WTI and Brent volumes on these days. The futures attracted both international commodity traders as well as China's state-owned oil companies. While we agree that further liberalization of China's financial markets would promote the use of its currency – renminbi, the lack of transparency of the currency's pricing mechanism and the unpredictable government policies suggest that the road to renminibi internationalization remains a protracted one. Action Insight | Market Overview | Central Bank Views | China Watch | Special Topics | Oil N' Gold | Live Comments Technical Outlook USD/CAD Daily Outlook Daily Pivots: (S1) 1.2750; (P) 1.2837; (R1) 1.2892; More.... Intraday bias in USD/CAD remains on the downside with focus on 38.2% retracement of 1.2246 to 1.3124 at 1.2789. Near term trend could have reversed with head and shoulder top pattern (ls: 1.3000; h: 1.3124; rs: 1.2942). Sustained trading below 1.2789 will confirm this case. It will also indicate rejection by 1.3065 fibonacci level. Deeper fall would than be seen back to 1.2246 support next. On the upside, though, break of 1.2942 will indicate support from 1.2789 and turn bias back to the upside for 1.3124. Suggested Readings EUR/GBP Could Resume Its Downtrend?What A Difference A Day Makes, 24 Little HoursUSD Mixed Ahead Of US Private Jobs DataEurozone Flash CPI to Show Inflation Recovery But ECB Could Remain PatientEconomic Data
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