Premarket |Tensions between the US and China over visit to Taiwan

2022-08-02 16:23:44 By : Mr. JianFei Huang

Asian stock markets fell on Tuesday on new doubts about geopolitical risk between the US and China.The Hong Kong Stock Exchange today lost 2.36% in its main benchmark index, the Hang Seng, amid uncertainty over the possible arrival in Taiwan tonight of the Speaker of the US House of Representatives, Nancy Pelosi.Thus, the Hang Seng follows the trend of the mainland Chinese stock exchanges in Shanghai and Shenzhen, which dropped 2.26% and 2.37%, respectively, today.Recently, since the US media advanced the possibility of Pelosi's trip, both military and civilian Chinese representatives have warned of possible consequences of the US official's trip.Chinese Defense Ministry spokesman Tan Kefei recently stated that the Chinese military "will not sit idly by" if the visit takes place.On the other hand, the Central Bank of Australia has raised its interest rates by 50 basis points, from 1.35% to 1.85%.Thus, the agency follows the hawkish trend of the rest of the main central banks to combat global inflation.European shares fell on Tuesday as weak global factory data stoked fears of an economic slowdown, while investors were also on edge over Nancy Pelosi's visit to Taiwan.The Stoxx 600 Index was down 0.5%.European stocks ended lower in the previous session as well, as energy sector stocks fell on the back of lower crude prices.Today, however, the European energy sector was buoyed by strong results from BP, which rose 3.1% in London after posting a second-quarter profit that beat estimates.Among the main macroeconomic references in Europe, the unemployment rate and consumer confidence in Spain stand out.Wall Street will open lower and with doubts due to Nancy Pelosi's expectations and her visit to Taiwan despite Chinese threats.This trip by Pelosi would take place at a time when the US was saying that she would not be intimidated by the threats of the Xi Jinping government not to sit "idly by" if she made her visit to the self-governed island and claimed by Beijing.“Last Sunday, Pelosi began a controversial trip through the Asia-Pacific region whose official itinerary did not include Taiwan, although this stopover is taken for granted in the US media, after anonymous sources from the White House confirmed those plans despite the serious Chinese threats.Specifically, the president of China, Xi Jinping, warned Joe Biden last Thursday in a video call that this trip would be equivalent to “playing with fire”.Despite everything, the White House has declared a few hours ago that Pelosi "has the right" to travel to Taiwan if she so desires," they warn in Banca March."Nationalist sentiment is rising in mainland China and Beijing has warned of 'strong action' if Pelosi goes ahead with the trip," reports the state-run South China Morning Post.On the other hand, the season of business results continues.Today they present the figures of her AMD, PayPal, Airbnb and Occidental, among others.In the US, the Redbook Retail Sales Index and weekly API Crude Stocks will be released.Oil prices slipped on Tuesday as investors absorbed a gloomy outlook for fuel demand with data pointing to a slowdown in global manufacturing just as OPEC+ producers meet this week to decide whether to increase supply.Brent crude lost 0.6% to $99.36 a barrel, while US West Texas Intermediate crude fell 0.5% to $93.38.Surveys on Monday showed factories in the US, Europe and Asia struggled to regain momentum in July as global demand faltered and China's strict Covid-19 restrictions cut output.Oil soared in early 2022, with benchmark Brent in March nearing its all-time high of $147 a barrel after the Russian invasion of Ukraine added to supply concerns.Since then, doubts about slowing growth have overshadowed the limited supply."These readings did nothing to mitigate recession fears," said Tamas Varga of oil brokerage PVM.(The Wall Street Journal, Reuters, Finviz, Investing, Markets Insider, Ámbito, 20 minutes, Valora Analitik).Our portfolio of services is: