S&P500 rebounds sharply after seeing worst selloff since 1987 on Thursday.
Resistances are seen at the 2700 and 3100 price levels.
S&P500 daily chart
The S&P500 Index is retracing back up sharply following one of
the worst days in history on Thursday as the Coronavirus is spreading
fear. As the market is pulling back up, the index could climb towards
the 2900 and 3100 price levels in the coming sessions. However, as the
S&P500 remains fragile the move up may end up being a dead-cat
bounce if the 2400 support fails to hold prices.
China-Sweden political tensions are escalating –another trade war heading into 2020?
Political contagion of aggressive trade tactics may spark other trade spats, slow growth
Swedish Krona has been on a downtrend since 2017, but it could be staging a recovery
CHINA-SWEDEN TRADE WAR?
China and Sweden may be on the verge of starting a small-scale trade war amid growing political tensions since November. The latest source of angst comes after Chinese dissident Gui Minhai was awarded a freedom of speech award known as the Tucholsky Prize. China’s Ambassador to Sweden Gui Congyou responded that if Swedish officials sanctioned the award then there would be unspecified “countermeasures”.
Stockholm’s Cultural Minister Amanda Lind not only attended the event but also presented the award, defying the Ambassador's warnings. He now says Sweden will face the consequences of “meddling” in China’s affairs. Beijing supported this position, reiterating that if any government officials – including Sweden’s Prime Minister Stefan Lofven – attended the event they would not be welcome in China.
The Ambassador warned that no one is allowed to undermine Chinese interests and be able to reap the benefits of an economic relationship with them simultaneously. He went on to say that China will impose “restrictions” on trade with Sweden. 16 percent of the Nordic country’s cross-border sales go to Asia, with China constituting the largest portion with 4.9 percent.
While the scale of a China-Sweden trade war will not make a significant impact on the global economy, it speaks to a far larger and more insidious problem afflicting the world. Since US-China tensions rapidly escalated in 2018, there has been anoutbreak of trade warsin both developed and frontier economies. This has led to fractured supply chains and escalated geopolitical tensions, both of which have undermined growth.
The acidic nature of unilateralism rusts away the institutional foundations of a rules-based system that provides investors with a degree of certainty. Consequently, when this occurs, growth and investment slow due to the uncertainty associated with political peril, a notoriously elusive risk which is almost impossible to quantify. In this environment, commodity-linked currencies – like the Swedish Krona – suffer along with stock markets.
SLOWER EU GROWTH ALREADY WEIGHING ON SWEDEN’S OUTLOOK
The prospect of softer exports to China also comes at an economically-precarious time for the Nordic country, as Europe – Sweden’s largest trading partner – continues to slowdown amid Brexit uncertainty. While its capacity to influence Riksbank monetary policyafter the most recent meetingis unclear, it adds another drop to a growing ocean of fundamental risks, which, if strong enough could tilt officials to become more dovish.
SWEDISH KRONA OUTLOOK
On a technical level, the Swedish Krona may be entering a period of a short-termrecovery heading into 2020. Using a currency basket composed of theUS Dollar,British Pound,EuroandJapanese Yenagainst SEK, it shows that the Krona has been on a steady downtrend since August 2017. However, the recent breakout suggests there is room for upside potential as market optimism pushes the cycle-sensitive SEK higher.
Good Friday Agreement耶穌受難日協議 耶穌受難日協議是北愛爾蘭和平進程中的里程碑，結束了英國和愛爾蘭之間長達30年的暴力糾紛。該協議規定了北愛爾蘭各政黨之間的關係以及愛爾蘭共和國和英國之間的關係。根據該協議，愛爾蘭共和國承認北愛爾蘭是英國的一部分，且愛爾蘭和英國邊界的安全屏障和檢查站都被拆除。然而，英國脫歐後，兩國唯一的陸地邊界就是北愛爾蘭和愛爾蘭共和國之間的邊界，這種情況是歐盟和英國都不願意接受的，點此查看全文分析。
Hard Brexit/No Deal Brexit硬脫歐/無協議脫歐 在硬脫歐/無協議脫歐情景下，英國將不允許歐盟公民自由流動，不向歐盟預算捐款，也不受歐洲人權法院規則的約束，英國可能會尋求與歐盟達成一項新的貿易協議，但若達不成協議（目前來看極有可能），英國可能會與歐盟恢復世界貿易組織WTO下的貿易規則。
Lisbon Treaty里斯本條約 里斯本條約生效於2009年12月1日，是對Treaty of European Union歐盟聯盟條約和Treaty on the Functioning of the European Union歐洲聯盟運作條約的補充。該條約允許成員國作出必要的改變，使27個成員國組成的歐洲聯盟充分運作和擴大，以便更加順利推動歐洲一體化進程。
按圖放大
按圖放大小時圖顯示，油價目前20.0美元附近獲得支持，並未進一步擴大跌幅有利於後市構建反彈走勢，一旦後市油價企穩20.0美元，後市有望反彈挑戰30.0美元水平，但就長期而言，觸底仍言之尚早。
