ASX 200 Index: Moving higher despite the reverberation of trade war tones
- Markets have settled post the trade-war comments and the index has hung onto gains.
- Chinese data arrives mixed, markets shrugged off the negatives and take to the positives.
The ASX 200 Index is currently trading at 5,461.60 between a range of 5,393 and 5,472.60 and is performing well despite the downbeat mood pertaining to recent remarks from the US President Donald Trump.
Earlier, Trump, in Reuters interview, has said that the trade deal with China has been "upset very badly" by the coronavirus and risk turns sour – US dollar spikes.
Key comments
- President Trump, in Reuters interview, says china "will do anything they can to have me lose" 2020 election.
- Says looking at different options in terms of consequences for China for its handling of coronavirus crisis.
Nevertheless, despite the initial risk-off spike in the USD, markets have settled to a degree and the index has hung onto gains and moved higher in fact. Meanwhile, it has been pretty busy all over the place in markets today, from European, US and Chinese data to the Federal Reserve, corporate earings and all that which comes before the European Central Bank today.
The Fed was, as expected, a pretty benign outcome for market participants and more on that here: No changes in policy, at least for now – Wells Fargo
As for data, China's Manufacturing and non-manufacturing PMIs show the economy is expanding, especially the service sector, for April which is positive for the Pacific nations and the index. China official PMI for April Manufacturing 50.8 (expected 51.0). However, China's Caixin Manufacturing PMI contracted to 49.4 in April vs. 50.1 last, although the Aussie and index were unfazed.
ASX 200 Index levels
The ASX 200 is testing the 38.2% Fibonacci level (5470) and leaving behind the 23.6% Fibo below it. A break higher will extend towards a 50% mean reversion at 5794 ahead of a 61.8% golden ration at 6127. The bears will be looking for an extension below the COVID-19 lows of 4402.