China plans visa restrictions for USA nationals with 'anti-China' links

Marco Green
October 10, 2019

Australian shares were down 0.92%.

Financials also faltered in the early morning trade. Japan's Nikkei slid 0.81%.

Meanwhile, the Fed Chair Jerome Powell's comments on Tuesday suggested that interest rate cut in October was not a done deal, though did little to influence firming market expectations of a third interest rate cut this year at the upcoming FOMC meeting on October 29-30.

Oil prices extended declines as USA visa restrictions on Chinese officials and the addition of more Chinese companies to a U.S. trade blacklist weighed on already slim hopes that Washington and Beijing could reach a truce at trade negotiations this week. Slower growth in the USA and China, the world's two-largest economies, suggests less demand for energy in the future. We're losing confidence in the USA economy. Quoting statistics, on Tuesday's (October 8th) Wall St. closure, trade sensitive Dow fell by 1.19 per cent to settle down the day at 26,164.04 and S&P 500 index was plunged by 1.56 per cent to wrap up the day at 2,893.06, while leading the falls of Tuesday's (October 7th) Wall St., Nasdaq was nudged 1.67 per cent lower to wind down the day at 7,823.78.

The Trump administration continued to pile pressure on China, imposing visa restrictions on Chinese government officials just a day after it added 20 Chinese government agencies and tech companies to the US Entity List, in effect blacklisting them from doing business with American firms.

Several reports at the start of the week indicated that China won't even discuss some of the issues the U.S. is demanding like industrial subsidies and IP theft.

The US can be transferring forward with discussions on potential restrictions on capital flows to China, with a give attention to investments by US authorities pension funds, Bloomberg reported.

Just as China appeared not to be interested in the type of comprehensive trade deal that Trump wants, matters got worse for indices on re-emerging reports that the White House is studying proposals to limit U.S. govt pension investments in Chinese stocks.

In bond markets, U.S. Treasury yields US10YT=RR rose as investors happy to take on more risk sold out of safer assets.

Gold also advanced higher, reaching $1511 an ounce, but the yen gave back some of yesterday's gains.

Stocks gained on Wednesday on a report that China could yet agree to a partial trade deal with the United States despite recent tensions, while the prospect of a last-minute Brexit agreement between the European Union and Britain seemed as remote as ever. The spread between two-year and 10-year Treasuries, the most common definition of the yield curve, widened to 11.3 basis points. Powell says the Fed is prepared to act as necessary and may begin increasing the balance sheet again soon.

The Fed had been shrinking its balance sheet as it unwound crisis-era bond buying programmes. Recent volatility in U.S. money markets raised concern the Fed's balance sheet had become too small, leaving banks with inadequate reserves.

Powell said balance sheet expansion should not be read as an effort to stimulate the economy, but weak data on the United States manufacturing and services sector last week rattled investors' confidence that the U.S. economy remained robust.

USA crude oil futures fell 0.42% to $52.41.

Other reports by Click Lancashire

Discuss This Article