Asian cash responded to the US news of possible tax plan delays and we saw profit-taking and nerves for the first time in a while. It’s interesting that this has occurred on our expected November temporary pause.
The Nikkei has returned -0.8%, which added to yesterday’s decline but is falling from the 26 year high. Values were lower in morning trading but recovered much in afternoon trade. The Yen, uncharacteristically, has been content to play in a very narrow range which is a good indication that many players are sitting on the sidelines. Normally, we see the Yen strengthen in a flight to safety, but this selloff feels to have less people concerned as they wait anxiously for lower prices in order to buy.
China’s Shanghai index offset the Hang Seng close with the two returning very little either way. The talk in China today was the move towards opening its market by increasing the amount of percentage available to foreign companies in JV’s. This is another stage in opening the Chinese financials markets and a move which many will welcome. Little by little these changes demonstrate their contention as the next global financial center.
On a day when many were happy to sit and wait or at least, not chase offers, markets dropped but still with little volume. BREXIT talks were the hot topic of conversation with the EU telling the UK to move faster. This uncertainty looks to be all part of their strategy of applying pressure in any direction they can to unsettle an already unsettled government. GBP rallied the past couple of days but has turned back towards the end of US trading. FTSE followed the DAX and CAC indices lower closing down around -0.5% on the day. Given the fact that the equity selloff we have seen this week ‘seems’ to be reasonably well controlled, the demand for gold has subsided and today we saw the $1270 level again under pressure. Gold still trades heavy with lower prices still on the cards.
