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Blacklisted

The United States blacklist has gained eight new Chinese technology companies, added to the list on Monday under the Trump administration. The White House accused these eight tech companies of being implicated in human rights violations against Muslim minorities in China’s far-western province of Xinjiang.

Two of the companies included on the list are Hangzhou Hikvision Digital Technology Co. and Zhejiang Dahua Technology Co. both companies specialize in video surveillance, that control nearly a third of the global market for video surveillance, with their cameras all over the world.

With China’s Vice Premier Liu He scheduled to arrive in Washington for high-stakes trade talks being viewed by financial markets around the world, the timing for these blacklisted companies seem less than ideal.

President Donald Trump has stated “there’s a chance that we could do something very substantial” regarding the scheduled meeting. Furthermore, warning China that if the Nation does anything “bad” to quell protests in Hong Kong, trade negotiations with the United States would suffer.

As a result, Wall Street closed in the red, as optimism of an abrupt trade war resolution faded. On Tuesday, a Chinese newspaper reported that China has toned down it’s expectations ahead of the new negotiations meeting scheduled to start Thursday in Washington. Stating that Vice Premier Liu He will not carry a “special envoy” title, signalling low commitment.

Investors are also awaiting possible Chinese retaliation following the additions to the blacklist on Monday. From a macro perspective, U.S. producer pricing saw the largest decline in eight months this September. Creating more room for monetary easing.

As a result, trade tensions and on going weak global demand took its toll on U.S. stock process.

NZDUSD stages recovery

News Summary:

  1. US ADP is lower than expected. That makes USD's broad weakness. NZDUSD currency pair get profit because of that.
  2. For the global trade trend, US-EU trade tension leads to an escalation of global trade threats
  3. the US ISM Non-Manufacturing PMI became the lowest point about ten years.

News details:

First of all, according to the newest US ADP report, private business in the United States hires 135 thousand workers in September, which is lower than expected. Also, ISM is a signal for the manufacturing industry shrinking. People worried about the US overall economy. Moreover, the US Dollar Index drops over 99 marks.

Secondly, The EU and the United States have threatened to impose tariffs on imported products. The United States will impose a 10% retaliatory tariff on EU aircraft and a 25% retaliatory tariff on agriculture and industrial products. The pessimism environment of global trade, especially between EU and US, benefits for kiwi dollar.

Finally, Chinese holiday results a lack of key data of business and trading activities. Therefore, it makes Asian business under pressure. However, the USD is weak that makes NZD going forwards.

Technical Analysis

The three-week downtrend line is at 0.6285, which is the nearby upward resistance. The key to the pair's further rebound to the 21st Simple Moving Average (SMA) level of 0.6330. However, if it falls below 0.6250, the seller will retreat to the integer target of 0.6200.

In the same time, there are some additional information we need to focus on.  For example, New Zealand’s (NZ) ANZ Commodity Price Index data for September month. It is expected to be 0.4%, with a previous value of 0.3%. Investor should also focus on trade headlines during the Chinese holiday season. Investor looking forwards to see those data that may fluctuate the kiwi dollar price.