Asian markets continue to slide as trade war worsens

IC Markets Market Review
IC Markets Market Review

Global Markets:

  • Asian Stock Markets : Nikkei down 0.76%, Shanghai Composite down 1.36%, Hang Seng down 1.01%, ASX down 2.37%
  • Commodities: Gold at $1474.85 (-0.11%), Silver at $16.42 (+0.15%), Brent Oil at $60.32 (+0.85%), WTI Oil at $55.19 (+0.91%)
  • Rates : US 10-year yield at 1.758, UK 10-year yield at 0.508, Germany 10-year yield at -0.514

News & Data:

  • (USD) ISM Non-Manufacturing PMI 53.7 vs 55.5 expected
  • (USD) Final Services PMI 53 vs 52.2 expected
  • (GBP) Services PMI 51.4 vs 50.4 expected
  • (EUR) Sentix Investor Confidence -13.7 vs -6.9 expected
  • (EUR) Final Services PMI 53.2 vs 53.3 expected
  • (EUR) German Final Services PMI 54.5 vs 55.4 expected
  • (EUR) French Final Services PMI 52.6 vs 52.2 expected
  • (EUR) Italian Services PMI 51.7 vs 50.6 expected
  • (EUR) Spanish Services PMI 52.9 vs 53.6 expected
  • (CHF) Retail Sales y/y 0.70% vs -0.60% expected
  • (CHF) SECO Consumer Climate -8 vs -8 expected
  • (CNY) Caixin Services PMI 51.6 vs 52 expected
  • (NZD) ANZ Commodity Prices m/m -1.40% vs -3.90% previous
  • (AUD) MI Inflation Gauge m/m 0.30% vs 0.00% previous
  • (NZD) Employment Change q/q 0.80% vs 0.30% expected
  • (NZD) Unemployment Rate 3.90% vs 4.30% expected
  • (NZD) Labor Cost Index q/q 0.80% vs 0.70% expected
  • (GBP) BRC Retail Sales Monitor y/y 0.10% vs -1.60% previous
  • (JPY) Average Cash Earnings y/y 0.40% vs -0.80% expected
  • (JPY) Household Spending y/y 2.70% vs 1.30% expected
  • (AUD) ANZ Job Advertisements m/m 0.80% vs 4.90% previous
  • (AUD) Trade Balance 8.04B vs 6.05B expected
  • (NZD) Inflation Expectations q/q 1.86% vs 2.01% previous
  • (JPY) 30-y Bond Auction 0.29|3.5 vs 0.36|4.0 previous
  • (AUD) Cash Rate 1.00% vs 1.00% expected
  • (JPY) Leading Indicators 93.30% vs 93.60% expected
  • (EUR) German Factory Orders m/m 2.50% vs 0.50% expected

Markets Update:

Asian stock markets fell in early trading Tuesday, following Wall Street’s worst day of the year as trade tensions between the U.S. and China grew even worse. Many indexes rose from session lows after China’s central bank set the yuan’s reference point higher than expected early Tuesday, but the yuan declined to 7.0562 in early trading Tuesday.

The U.S. Treasury Department labelled China a currency manipulator for the first time since 1994, opening the door to new sanctions and ratcheting up already high trade tensions. The more stable yuan is also feeding the recovery elsewhere with US equity futures near flat levels as we European trading begins.

Japan’s Nikkei 225 traded 0.76% lower. Data from the labor ministry showed the country’s real wage in June fell 0.5% from a year earlier, compared with a downwardly revised 1.3% annual decline in May. Hang Seng recovers from session lows as U.S.-China trade tensions rise and is trading down by 1%. Australia’s ASX 200 slid 2.37% while the Shanghai Composite tumbled 2.4% even as the Yuan stabilises.

The 10-year US Treasury yield dipped to 1.75% — its lowest level since October 2016. Yields fall as demand for bonds increases and prices rise. It’s a sign of growing investor anxiety about where the global economy is headed. Oil prices gained on Tuesday in Asia despite concerns that escalating Sino-U.S. trade war could negatively impact demand for crude.

WTI rose 0.91% while Brent Oil climbed 0.85% to trade at $60.32 per barrel.  Gold prices were little changed on Tuesday in Asia after hitting new six-year highs in the previously session amid escalating Sino-U.S. trade tensions. The safe-haven gold attracted safe-haven demand and reached as high as $1,481.75 on Monday following the latest trade news, its highest level since September 2013. The yuan slipped on Tuesday in Asia as China sets the daily currency fixing at a stronger-than-expected level while the dollar gained 0.53% to 106.15 yen from Monday’s 106.15 yen.

Upcoming Events:

  • 2:00 pm GMT – (USD) JOLTS Job Openings
  • Tentative – (USD) IBD/TIPP Economic Optimism
  • Tentative – (NZD) GDT Price Index
  • 4:00 pm GMT – (USD) FOMC Member Bullard Speaks
  • 10:30 pm GMT – (AUD) AIG Construction Index
  • 11:50 pm GMT – (JPY) BOJ Summary of Opinions
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