Asian markets mixed; cautiously moving higher as yuan remains weak

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IC Markets Market Review
IC Markets Market Review

Global Markets:

  • Asian Stock Markets : Nikkei down 0.33%, Shanghai Composite up 0.11%, Hang Seng down 0.11%, ASX up 0.64%
  • Commodities: Gold at $1499.85 (+1.05%), Silver at $16.73 (+1.75%), Brent Oil at $58.78 (-0.27%), WTI Oil at $53.52 (-0.21%)
  • Rates : US 10-year yield at 1.689, UK 10-year yield at 0.517, Germany 10-year yield at -0.554

News & Data:

  • (NZD) Official Cash Rate 1.00% vs 1.25% expected
  • (AUD) Home Loans m/m -0.90% vs 0.60% expected
  • (AUD) AIG Construction Index 39.1 vs 43 previous
  • (NZD) GDT Price Index -2.60% vs 2.70% previous
  • (USD) IBD/TIPP Economic Optimism 55.1 vs 54.6 expected
  • (USD) JOLTS Job Openings 7.35M vs 7.34M expected
  • (EUR) German Factory Orders m/m 2.50% vs 0.50% expected
  • (JPY) Leading Indicators 93.30% vs 93.60% expected
  • (AUD) Cash Rate 1.00% vs 1.00% expected
  • (JPY) 30-y Bond Auction 0.29|3.5 vs 0.36|4.0 previous
  • (NZD) Inflation Expectations q/q 1.86% vs 2.01% previous
  • (AUD) Trade Balance 8.04B vs 6.05B expected
  • (AUD) ANZ Job Advertisements m/m 0.80% vs 4.90% previous
  • (EUR) German Industrial Production m/m -1.50% vs -0.50% expected
  • Official Cash Rate reduced to 1 percent
  • China plans to remove soybean oil from import tariff quota management

Markets Update:

Shares in Asia fell for an eighth straight session on Wednesday, after China’s central bank moved to ease fears of a full-blown currency war. The People’s Bank of China early Wednesday set the daily reference point for the yuan at 6.9996 per dollar, a bit weaker than expected.

Trade tensions escalated Monday when the yuan passed 7 per U.S. dollar that sparked a global stock selloff and spurred the U.S. Treasury Department to label China a currency manipulator. Global investors have grown nervous lately about the possible impact that a trade war between the U.S. and China could have on the economy and corporate profits

Market movements in Asia on Wednesday were significantly more muted than the previous two trading days. Japan’s Nikkei slid 0.33% on worries that a stronger yen will put more pressure on its struggling exporters. Hong Kong’s Hang Seng Index retreated 0.11% while the Shanghai Composite was down 0.11% after heavy selling in the previous sessions.  Still, selling pressure was mild compared with the last few sessions, when trade tensions intensified by the day. Australian shares, on the other hand,  gained 0.64% after New Zealand’s central bank cut its benchmark interest rate by a half-percentage point to an all-time low of 1% as it forecast tougher economic conditions ahead.

In late U.S. trading, benchmark 10-year yields were down 0.8 basis point at 1.689%. They touched 1.672% overnight, marking their lowest level since Oct. 5, 2016.In the currency market, the dollar traded at 106.10 yen, down 0.33 on the day but off Tuesday’s seven-month low of 105.52.

Oil prices also weakened, with global benchmark Brent crude slipping to seven-month lows, as trade tensions between the U.S. and China sparked concerns over demand. U.S. Crude Oil WTI Futures slipped 0.2% to $53.52 while International Brent also slipped 0.27% to $58.78. The safe-haven gold was buoyed by safe-haven demand amid the intensifying U.S.-China trade war and falling stock markets. Gold prices gained almost 1% to $1499.85 an ounce on Wednesday in Asia amid the ongoing Sino-U.S. trade war.

Upcoming Events:

  • 2:00 pm GMT – (CAD) Ivey PMI
  • 2:30 pm GMT – (USD) Crude Oil Inventories
  • 5:01 pm GMT – (USD) 10-y Bond Auction
  • 7:00 pm GMT – (USD) Consumer Credit m/m
  • 9:30 pm GMT – (AUD) RBA Assist Gov Bullock Speaks
  • 12:00 AM GMT – (GBP) RICS House Price Balance
  • 12:00 AM GMT – (JPY) Bank Lending y/y
  • 12:00 AM GMT – (JPY) Current Account
  • &more…

 

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