29 August 2019 : The rally in US equities yesterday failed to impress Asian investors. The Dow Jones Industrial Average rose 1% on Wednesday driven by the Basic Materials and Consumer Cyclical sectors, while the Nasdaq Composite ended the session only 0.38% higher as the Technology sector was left behind. Despite a 5% drop in the Volatility Index, sentiment was kept in check as the rally in stocks was not accompanied by higher trading volumes, and the US 2-10 yield curve remains inverted for five consecutive days.

As long as the US-China trade dispute remains unresolved it’s hard to see a sustainable rally in equities, and with new trade tariffs coming up next week, expect further negative impact on economic data. That’s why investors continue to pour money into long-term government bonds with the US 30-year yields reaching a record low of 1.90% on Wednesday.

Most Asian equity indices are trading in red, and US futures are indicating a lower open for Wall Street.

Source: FXTM Chief Market Strategist, Hussein Sayed

Reporting for EasyKobo on Thursday , 29 August 2019 in Lagos, Nigeria