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Message: [QUOTE="Tickmill-News, post: 161875, member: 55473"] [SIZE=6][B]Yuan’s confident rally drops some clues about trade talks success[/B][/SIZE] The Asian markets opened on Wednesday with a decline as a result of investors’ tendency to liquidate their long positions in Asian stocks before the period of high market turbulence. The meeting of FOMC officials is today, which should determine the fate of monetary tightening cycle in the US. The broad MSCI index, which tracks the aggregate stock returns in the Asia-Pacific region, except Japan, fell by 0.2%. The leaders of the fall were shares of Australia and South Korea. European stock futures have been also wary about possible surprises in the US. The concerns drove futures lower indicating that European session is also likely to spend most of the time in the red zone today. The Japanese Nikkei index lost 0.2%, while shares of companies in mainland China have changed little, posting tepid response to the updates on trade negotiations. New difficulties in trade talks between China and the United States have become one of the reasons that deprived the stock market of a positive mood. Bloomberg said that China does not agree to some of the demands of the American side due to the lack of guarantees that the tariffs will be canceled after the deal is made. At the same time, the WSJ, referring to sources familiar with the course of the negotiations, wrote that the negotiations have reached the final stage and the end of April is the reference date of the deal. US Trade Representative Robert Lighthizer and Treasury Secretary Stephen Mnuchin plan to visit China next week to sum up the interim progress in the negotiations, the White House administration said on Tuesday. Yuan has been decisively updating highs thanks to positive WSJ note: [IMG]http://blog.tickmill.com/wp-content/uploads/2019/03/1-13-1024x694.png[/IMG] Asian firms are postponing investment plans as indicated by INSEAD poll. The confidence remained at the lowest level for three years in the first quarter and contagion spread to investors who are not in a hurry to stage a rally in the stock market. Trade wars, interest rate hikes and slowdown in the Chinese economy were listed among the top risks for the companies. The Fed is expected to leave the interest rate unchanged at today’s meeting, so the focus of market participants is shifting to the regulator’s expectations, in particular, plans to complete the asset sales program and the change in forecasts for macroeconomic indicators – GDP and inflation. Since the beginning of this year, Jeremy Powell has persistently intertwined the phrase “patient Fed” in his comments, so that with the incoming data more and more it acquires an interpretation of the Fed’s intention to complete the normalization of monetary policy. Futures on the interest rate price in first rate cut in 2020 and based on this fact it will be difficult for Powell to disappoint the markets today. The current volume of assets on the Fed’s balance sheet is about 4 trillion. dollars, consisting predominantly of treasury bonds and mortgage-backed debt. It is difficult to call the program of reducing assets on the balance sheet as such, since after buying assets from the pre-crisis level of $900 billion to $4.5 trillion, the Fed was able to release to the market a total of $500 billion worth securities. The need for the swelled balance sheet stems from the transition to the so-called system of abundant reserves where the major amount of excess reserves of banks are kept on the Fed’s accounts, which makes it easier to keep the market federal funds rate within a certain range. The final balance at the time of the completion of the asset sale program is projected at $3.85 trillion and the composition of the assets will primarily contain treasury securities. [IMG]http://blog.tickmill.com/wp-content/uploads/2019/03/2-11-1024x498.png[/IMG] The British Pound remains hostage to Brexit-related headlines. Prime Minister Theresa May will be begging for another postponement for leaving Britain from the EU for at least another three months after the third vote on her plan failed. May’s blackmail of the Parliament is now in the simple principle of “My plan or no plan” and asking the EU to delay the process can bring the process closer to “no” plan that certainly won’t suit the Parliament. On the other hand, the head of the EU Brexit negotiation team, Michael Barnier, said that extending the time frame for discussing the plan would make sense if May’s chances of ratifying her agreement increase in the Parliament. Oil continues to cautiously update its highs against the background of a decrease in the activity of American oil companies, as shown by data on drilling rigs from Baker Hughes and a gradual shift in market equilibrium in favor of the deficit, which the IEA recently warned in its report. Please note that this material is provided for informational purposes only and should not be considered as investment advice. Trading in the financial markets is very risky. [/QUOTE]

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