FOREX TRADING STRATEGY JUN 18 - ALL EYES ON CHINA

Jun 18, 2020
Tags
Categories

China once again stirs the pot of global events. Check out the latest updates in order to choose the most suitable forex trading strategies.

Too many concerns

When Chinese officials in Wuhan struggled to prevent a deadly coronavirus outbreak in January, Xi Jinping himself stepped in and took control. Now Xi, who claims to be personally responsible for every aspect of China's response to the pandemic, faces another rapid outbreak in Beijing. The cluster of more than 130 cases in the city is at risk of weakening the government of the government that has handled the disease better than many Western countries. The epidemic cluster can also attack the recovery of a young economy if it turns into a second wave of infection.

Even more threatening is for Xi, who has put his faith in China's reaction and seeks to frame himself as a global leader in a crisis. Not only that, challenges from the outside are not few. He is navigating the re-election of the US president, who has often created barriers for China, such as punishing Chinese officials for imprisoning over one million Muslims in the region. Recent Uyghur. And now China is also embroiled in a risky quarrel with neighboring India after a brawl in a remote contested border area in the Himalayas has led to the death of 20 Indian soldiers and an unspecified number of Chinese soldiers.

A quiet market

Asian stocks were poised to open quietly after US stocks and Treasury bonds fell, and the dollar ended the session with little volatility as investors continued to consider an increase. in coronavirus infections in the face of optimism about stimulation measures. The futures market in Japan is little changed, while the markets in Hong Kong and Australia are down. The S&P 500 index fluctuated continuously for most of the fourth day with sparse trading volume before turning to a bearish state at the end of the session due to the decline of stocks in energy, real estate and finance. Meanwhile, shares of Apple and Microsoft helped the Nasdaq Composite close with an increase. Crude oil prices fell and gold remained stable.

Big fluctuations in China

Chinese investors are gearing up for a major upheaval in the national stock market: For the first time in decades, some listed stocks in Shenzhen will be allowed to fluctuate up to 20% in a single session. They have doubled the ceiling since 1996, which has been applied to limit fluctuations in the nation's newly established Stock Exchange. More than 3,000 stocks across China fell to that limit on February 3, when markets reopened after a holiday due to the escalating coronavirus crisis.

The new rules will apply to the ChiNext board focusing on technology, a $ 1 trillion market - where speculative trading appears rampant. Many of their largest stocks also feature in well-monitored benchmarks such as the FTSE China A50 Index or the CSI 300 Index. Although the timing of applying these changes has not been set, regulators Funds, brokers and traders daily are preparing for a potential increase in volatility.