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    Afternoon Report – Tuesday 20th August




    Asian shares nudge higher on stimulus hopes, recession fears ease

    (Reuters 20/08/2019) - Asian shares extended their gains on Tuesday as hopes for stimulus in major economies tempered anxiety about a global recession, boosting riskier assets and drawing money from safe-havens such as bonds and gold.

    Shares in China and Hong Kong opened lower and swung in and out of negative territory after China lowered its lending reference rate only slightly in the first publication of a new benchmark since new interest rate reforms were announced on Saturday.

    Oil futures were also down in a tentative sign that worries about an attack at a Saudi oil field over the weekend have eased, but some traders were nervously monitoring an Iranian tanker at the center of a clash between Tehran and Washington.

    For now, however, investors were cheered by signs policymakers were willing to do more to support their economies in the grip of international trade frictions, led by the bruising Sino-U.S. tariff tussle.

    The immediate focus shifts to the minutes of the U.S. Federal Reserve’s last meeting due on Wednesday. Traders are also keenly waiting on the Fed’s Jackson Hole seminar and a Group of Seven summit this weekend for clues on what additional steps policymakers will take to bolster growth.

    Senior White House officials are discussing a temporary payroll tax cut to boost the economy, the Washington Post reported on Monday. Hopes for additional stimulus are rising after reports that Germany is prepared to increase fiscal spending, and after the People’s Bank of China took steps to lower corporate borrowing costs.

    “There are expectations for looser monetary policy everywhere in the world, and this is cushioning the markets against recent uncertain developments,” said Masayuki Kichikawa, chief macro strategist at Sumitomo Mitsui Asset Management Co in Tokyo.

    Get used to US-China trade war, Australian PM warns - Australian Associated Press

    (FXStreet 20/08/2019) - Australian Prime Minister Scott Morrison believes Australia and the rest of the world will need to get used to the trade war between the US and China and look for opportunities in the trade tiff.

    Morrison told the Seven Network on Tuesday: "I think we're going to have to get used to this for a while, this level of tension," Mr Morrison told the Seven Network on Tuesday. We've just got to accommodate that, we've got to absorb it, we've got to see the opportunities in it, of which there are many. It is worth noting that one of Australia's biggest agricultural competitors in China is America. So, the ongoing trade war between the US and China could be a blessing in disguise for the Australian farmers.

    "The US-China trade war could deliver Australian farmers a one-off $1 billion boost and generate an extra 3900 jobs just in time to offset the crippling cost of drought," according to a report by Shane Wright, a senior economics correspondent for The Sydney Morning Herald.

    China: Government borrowing is likely to increase yet again – Rabobank

    (FXStreet 20/08/2019) - Rabobank analysts note that China has announced that local government borrowing is likely to increase yet again from the already pre-announced CNY2.15 trillion (USD305bn) level of special bond issuance that has already been approved.

    Key Quotes: “Let’s recall that officially local governments are not allowed to run deficits; have nonetheless run up vast debts; we were told they were deleveraging; they have already had one de facto PBOC bail out; and they are now essentially becoming a normal arm of fiscal policy…except that most won’t be able to raise the revenue to ever repay this new (or old) borrowing given their tax-raising ability is mainly via rising land prices. If anything happens to property prices, it’s game over – and yet prices are already so high they are causing social problems and distorting the rest of the economy.”


    Below are Trading Central's Intraday preference recommendations. Short (SELL) positions and long (BUY) positions have two targets issued which may be used as take profit levels. Above or below a certain figure indicates the pivot level which may be used as a level for stop loss.

    CRUDE OIL Daily – Short positions below 58.70 with targets at 52.30 & 50.60.

    This is general advice only and does not take into account your personal circumstances. “It is the Policy of ForexCT to recommend the use of stop/loss function to reduce risk of significant losses to customers.

    USDJPY 30 Minute – Long positions above 106.40 with targets at 106.70 & 106.95.

    EURUSD 30 Minute – Short positions below 1.1100 with targets at 1.1075 & 1.1065.

    GBPJPY Daily – Buy above 125.93, rebound towards 136.57.

    AUDUSD Daily – Short positions below 0.6850 with targets at 0.6740 & 0.6670.

    GOLD Daily – Long positions above 1465.00 with targets at 1565.00 & 1600.00.

    ASX 200
    Daily – Short positions below 6630.00 with targets at 6210.00 & 6100.00.

    SILVER Daily – Long positions above 16.6000 with targets at 17.8000 & 18.2000.

    This is general advice only and does not take into account your personal circumstances. “It is the Policy of ForexCT to recommend the use of stop/loss function to reduce risk of significant losses to customers.

    Economic Announcements
    (times in AEST)

    Risk Warning
    Trading FX and CFDs involves a substantial degree of risk and should only be undertaken with risk capital. Please consider our PDS and FSG before trading with us. A copy can be found on our website Forex Capital Trading Pty Ltd provides general advice that does not take into account your objectives, financial situation or needs. Investors do not own or have rights to underlying assets. Forex Capital Trading Pty Ltd is regulated by ASIC (AFSL 306400), ABN (69119086270). Forex Capital Trading Pty Ltd’s AFS license and Australian regulation only applies to the financial services being provided in Australia only.

    Posted: August 20, 2019 | 5:50 AM