August 10, 2020
The FTSE 100 index started the new trading week in positive territory despite fears that further deterioration of US-China relations could leave America unable to agree a new economic stimulus program. Traders are focussing on Friday’s better than expected US employment data, which hinted that somewhat of recovery could be on the way.
In the Asian session, China’s main markets were hit by Washington’s imposition of sanctions, both on tech companies and the country’s officials. Chinese tech stocks fell following US President Donald Trump’s clampdown on US firms dealing with the owners of TikTok and WeChat. In addition to this, sanctions were directed at 11 Beijing and Hong Kong officials after the imposition of new national security laws in Hong Kong. Korea and Australia, meanwhile, were trading higher, while Japan has been closed for a public holiday.
Wednesday will see the unveiling of UK second-quarter gross domestic product data, which will reveal the scale to which the domestic economy has been hurt by the coronavirus pandemic.
Recently Spain recorded an 18.5% contraction in output, while the US was down 9%. The UK’s data will be relatively positive if it is somewhere between these. Economic re-openings have helped improve job numbers in recent weeks.
Traders could look beyond this, and the continued stand-off in Washington over new coronavirus pandemic economic stimulus plans has made the market more unpredictable.
Forex & Indices Analyst
James Stone is our Lead Forex and Indices Analyst.
James is a professional market analyst and day trader in Forex and Bitcoin.
He holds an MBA in Investment Finance and is working towards his Ph.D.
Before joining FVPTrade, James served as a senior analyst at Forex Live.