The Asian trading session on Tuesday saw Monday’s rally continue, with all major benchmarks trading higher after a positive session on Wall Street on Monday which saw both the Nasdaq and the S&P 500 close at record highs. Japan’s 225 lead the gains, spiking 1.88 percent as of 1:47 p.m. HK/SIN after being closed on Monday. Hong Kong’s Hang Seng Index was up 0.64 percent, South Korea’s Kospi was up 0.47 percent and Australia’s ASX 200 gained 0.15 percent. Both of China’s benchmark indexes were also higher.
The gains came even following reports that China is putting new pressure on the United States to remove additional tariffs in “phase 1” of the trade talks. The current plan is for the U.S. to cancel tariffs on approximately $156 billion of Chinese goods including laptops, toys, and cell phone. But sources cited by both CNBC and Reuters claim that China is now demanding the cancellation of 15% tariffs on another $125 billion of Chinese goods, and a reduction in the 25 percent tariffs currently on another $250 billion of goods. A private survey of China’s services sector showed that activity hit an eight-month low last month. The report confirms the PMI for October, which was 51.1, the country’s lowest level since February. The U.S. hasn’t publicly responded to China’s alleged demands, and it remains unclear whether these reported demands will impact the confirmation of “phase 1” later this month.
On the currency markets, the U.S. dollar firmed against all its major trading partners. The greenback surged against the safe-haven yen, trading up 0.18 percent to 108.76 as traders reflected their optimism for a trade deal by selling the yen. The British pound was down 0.01 percent against the dollar, trading at $1.2881, while the euro remained unchanged against the dollar.
Commodities also responded appropriately to the trade deal optimism, with gold futures dipping 0.13 percent to $1,509.10 per ounce as traders dumped the safe-haven asset in favor of riskier assets. Oil prices steadied on expectations of further demand that can result from a trade deal. Brent crude futures were up 0.14 percent to $62.22 per barrel and U.S. WTI futures rose 0.04 percent to $56.56 per barrel.