The Chinese economy has consumer and producer price inflation released today as Hong Kong stocks look for support.
HK 50 – Daily Chart
The HK 50 has found support at the 2024 highs but the rally has been less than the move in the US markets. That is likely due to a continued focus on Chinese imports.
The latest consumer and producer prices will be released at 9:30am HKT in China. Consumer prices are expected to show a small 0.1% gain. Producer prices are expected to fall -2.3%. Those are likely to fall further as tariffs impact the demand for Chinese products in the short-term.
Hong Kong stocks had registered their worst fall in 28 years before finding buyers. Shares in Japan, South Korea, and Australia have jumped in early trading with the Nikkei 225 and Kospi indexes gaining more than 5%. Australia’s benchmark saw a 3% rise.
Donald Trump’s tariff plans took a sharp turn as he eased up on global nations and focused on China. Trump’s threat to all nations appears to be a bargaining move, and it also looks like he is happy to destroy the global order to ensure that China comes to the negotiating table.
He removed “reciprocal tariffs” from America’s trading partners and applied 10% tariffs across the board. Mexico and Canada were both exempt and will revert to their original tariff plan. However, he upped tariffs on Chinese imports to 125% after China had announced 84% tariffs on US imports, vowing not to back down in the trade war.
In the hours before Trump’s announcement, the EU had also voted to impose tariffs on the United States, but were not subject to larger tariffs than the 10%.
Asian markets are expected to rebound on the latest developments but may not see strong buying until China and the US can settle their differences on trade relations.
