Brent crude futures were trading near $70 per barrel on Wednesday, boosted by news that the United States is considering additional sanctions against Iran. Brent was trading as high as $69.87 per barrel before falling to $69.69 per barrel as of 12:43 p.m. HK/SIN. Also pressuring prices was another disruption in Venezuelan supply. U.S. WTI futures were up 0-.30 percent to $62.77 per barrel. Signs that a trade deal is looming between the U.S. and China also sent signs that demand may increase.
Optimism about the trade deal also sent Asian stock prices higher on Wednesday morning Japan’s Nikkei 225 was up 0.85 percent as was Hong Kong’s Hang Seng Index, while South Korea’s Kospi was up 0.58 percent. The Shanghai Composite saw a modest 0.23 percent gain, though the Shenzhen Composite was trading down 0.02 percent. Analysts are quick to point out that the rally in Asian indexes and the optimistic sentiment about the trade negotiations are based on little more than hopes; there haven’t been any concrete news releases to indicate that a trade deal is imminent. It may be that the absence of negative news has created a positive sentiment which will either dissolve or strengthen based on the actual news that will be forthcoming after the trade talks later this week.
On the currency markets, the dollar was higher against the yen, but it struggled against its other primary trading partners. The greenback gained 0.08 percent against the yen, to trade at 111.40 just before 1 p.m. HK/SIN. The euro gained 0.17 percent against the dollar to trade at $1.1222, while the British pound was up 0.07 percent to $1.314. The Australian dollar enjoyed the steepest gains on the day, up 0.45 percent against the dollar to 0.7104, reversing most of the losses it saw yesterday when the Reserve Bank of Australia released its latest policy decision. Yesterday, the RBA left interest rates unchanged, a sign to some analysts that it may embrace an easier monetary policy in the near future.