Although stocks have been rising as global economies emerging from coronavirus restrictions begin to recover, market sentiment remains cautious due to growing tensions between North and South Korea, the eruption of deadly conflicts between India and China, and the fears that Covid19 will hit in the second wave in some countries.
Situation in the market
Better-than-expected May retail sales in the US yesterday led to gains on Wall Street. The US dollar rose on Wednesday as investors searched for safe haven, avoiding geopolitical risks.
The market sentiment is generally downward as six US states reported record-high coronavirus infections yesterday, new cases and restrictions were announced at the Chinese capital of Beijing, and Indian and Chinese militaries clashed in the Himalayas.
The dollar index rose by 0.2% to 97.25. The index rose from the last three-month low of last week, but the overall outlook remains cautious.
US Federal Reserve Fed President Jerome Powell reinforced hopes for continued policy support in his statements to the Senate. Powell will testify today in front of the House of Representatives Financial Services Committee.
British trade relations
Having a hard time getting what it wants from the European Union in the post-Brexit era, the London government is turning its face to Asia-Pacific.
UK Trade Minister Liz Truss announced on Wednesday that her country will try to join a renewed version of the Trans-Pacific Partnership (CPTPP).
“Today we are announcing our intention to join CPTPP, one of the largest free trade areas in the world,” said Truss.
Trans-Pacific Partnership (CPTPP) is a free trade agreement that connects 11 countries such as Japan, Malaysia and Vietnam, as well as Britain’s former colonies of New Zealand, Canada, Australia, Singapore, and Brunei, and Chile, Mexico, Peru in the Americas. When the deal is fully implemented, a trade block corresponding to 495 million consumers and 13.5% of global GDP will emerge, according to the Canadian government.
US election survey
Democrats’ presidential candidate Joe Biden made a 13-point lead this week over Trump as Americans further criticized President Donald Trump for the coronavirus outbreak and police brutality protests. The results of the survey conducted by Reuters / Ipsos between June 10–16 reveal that Biden made the biggest margin difference this year against Trump.
48% of registered US voters said they would support Democratic candidate Biden in the November 3 elections, and 35% would support Trump. The survey also showed that 57% of U.S. adults disapprove of Trump’s performance, whereas 38% approve.
The Chinese foreign ministry said on Wednesday that Beijing and New Delhi agreed to reduce tensions at the disputed border as soon as possible after their troops engaged in deadly combat.
Chinese Foreign Minister Wang Yi told his Indian counterpart Subrahmanyam Jaishankar on Wednesday that India should seriously punish those responsible for the conflict and control its frontline troops.
At least 20 Indian soldiers were killed in the conflict on Monday in the disputed Kashmir region between the Indian and Chinese border units. The Chinese Communist Party English media outlets confirmed that the Chinese side had losses, but did not give numbers.
Seeing India as a natural ally against China’s expansionist policy in central and southeast Asia, the US sent condolences to Indians.