The Sentiment Remains Sightly Negative as the Huawei Problem Keeps Being Dragged
The market sentiment has improved considerably this year so far, after it kept being terribly negative in the last months of the previous year. We can easily observe this from the price action in stock markets. In the last three months of 2018, stock markets tumbled lower, while in the last three weeks, they have made a bullish reversal.
Although, in the last two days they are retracing lower as sentiment turns sour once again. One of the reasons for this is the Huawei case which is having a domino effect in financial markets. Basically, Ms Wanzhou Meng, the CFO of Huawei, who is also the only child (you know the child Chinese policy) of the Huawei founder, was arrested in Canada and the US is asking for her extradition now.
The US accuses her of stealing Intellectual Property from US business partners, such as technology for a robotic device called “Tappy” that the US T-Mobile uses to test smartphones. I don’t know exactly what that is, but looks more like Star Wars and James Bond put together in one movie in real life.
The Huawei issue started some time ago last year during the trade tensions between the US and China and is being dragged into this year. It’s interesting to see how this will end up, but at the moment it is having a negative impact in financial markets as it weighs down on stocks, as well as on commodity currencies – hence the decline in AUD/USD and NZD/USD this morning. So, this is an issue to keep an eye on in the coming days/weeks.
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