Monday 16th July: Asian markets slump on weak Chinese data

IC Markets Market Review
IC Markets Market Review

Global Markets:

  • Asian Stock Markets : Shanghai Composite down 0.71%, Hang Seng down 0.22%, ASX down 0.47%
  • Commodities : Gold at $1244.50 (+0.27%), Silver at $15.87 (+0.35%), Brent Oil at $74.88 (-0.60%), WTI Oil at $69.44 (-0.73%)
  • Rates : US 10-year yield at 2.829, UK 10-year yield at 1.273, Germany 10-year yield at 0.280

News & Data:

  • (CNY) Industrial Production y/y 6.00% vs 6.50% expected
  • (CNY) Fixed Asset Investment ytd/y 6.00% vs 6.00% expected
  • (CNY) GDP q/y 6.70% vs 6.70% expected
  • (USD) Prelim UoM Consumer Sentiment 97.1 vs 98.1 expected
  • China GDP Growth Slows After Record Contraction In Shadow Banking Credit
  • Property UK: Asking prices plateau as more homes hit the market for sale
  • EU leaders coming to China, Japan to counter U.S. protectionism

CFTC Positioning Data (Week Ending July 10th, 2018)

  • EUR long 24K vs 37K long last week
  • GBP short 40K vs 29K short last week
  • JPY short 40K vs 39K short last week
  • CHF short 40K vs 40K short last week
  • CAD short 53K vs 49K short last week
  • AUD short 41k vs 39K short last week
  • NZD short 27K vs 26K short last week

Markets Update:

Asian shares fell on Monday as new data showed China’s economy slowed slightly in the second quarter, compounded by fears of a full-scale Sino-U.S. trade war looming over markets. Official data showed China’s economy grew 6.7 percent in the second quarter of 2018, cooling from the 6.8 percent growth registered in each of the previous three quarters. While the GDP figures were in line with market expectations, the new data also showed slower-than-expected growth in China’s industrial output, pointing to slowing momentum and prompting some analysts to call for stronger government measures to support growth. Taken together, the data show an economy continuing to slow under the influence of a multi-year crackdown on excessive financial risk, even as trade war headwinds gather.

Markets in Japan are closed today in observance of Marine Day. The Australian market is declining in cautious trades ahead of quarterly production results from mining and energy companies later this week. With China being its largest trade partner, weak Chinese data did not help Australian markets. The Hang Seng is slightly in the red; with property and materials stocks slumping, and most of those losses offset by gains in the technology sector.

Major currencies have been in a holding pattern in recent days thanks in part to a lull in China-U.S. trade skirmishing. Investors had also been awaiting the China data, and are still looking to June U.S. retail sales figures, to gauge the state of global growth. In currencies, the dollar index, which tracks the U.S. dollar against a basket of currencies, traded at 94.66, marginally lower than Friday. Crude oil prices dropped, weighed by easing concerns about supply disruptions that had pushed prices higher.

Upcoming Events:

Monday, July 16th 2018

  • 01:30 PM GMT – (CAD) Foreign Securities Purchases
  • 01:30 PM GMT – (USD) Core Retail Sales m/m
  • 01:30 PM GMT – (USD) Retail Sales m/m
  • 01:30 PM GMT – (USD) Empire State Manufacturing Index
  • 11:45 PM GMT – (NZD) CPI q/q

Tuesday, July 17th 2018  

  • 02:30 AM GMT – (AUD) Monetary Policy Meeting Minutes
  • 09:00 AM GMT – (GBP) BOE Gov Carney Speaks
  • 09:30 AM GMT – (GBP) Average Earnings Index 3m/y
  • 09:30 AM GMT – (GBP) Claimant Count Change
  • 09:30 AM GMT – (GBP) Unemployment Rate
  • 01:30 PM GMT – (CAD) Manufacturing Sales m/m
  • 02:15 PM GMT – (USD) Capacity Utilization Rate
  • 02:15 PM GMT – (USD) Industrial Production m/m
  • 03:00 PM GMT – (USD) Fed Chair Powell Testifies
  • Tentative – (NZD) GDT Price Index

Wednesday, July 18th 2018

  • 09:30 AM GMT – (GBP) CPI y/y
  • 09:30 AM GMT – (GBP) PPI Input m/m
  • 09:30 AM GMT – (GBP) RPI y/y
  • 10:00 AM GMT – (EUR) Final CPI y/y
  • 01:30 PM GMT – (USD) Building Permits
  • 01:30 PM GMT – (USD) Housing Starts
  • 03:00 PM GMT – (USD) Fed Chair Powell Testifies
  • 03:30 PM GMT – (USD) Crude Oil Inventories

Thursday, July 19th 2018

  • 02:30 AM GMT – (AUD) Employment Change
  • 02:30 AM GMT – (AUD) Unemployment Rate
  • 09:30 AM GMT – (GBP) Retail Sales m/m
  • 01:30 PM GMT – (USD) Philly Fed Manufacturing Index
  • 01:30 PM GMT – (USD) Unemployment Claims
  • 02:00 PM GMT – (USD) FOMC Member Quarles Speaks

Friday, July 20th 2018  

  • 09:30 AM GMT – (GBP) Public Sector Net Borrowing
  • Tentative – (All) OPEC-JMMC Meetings
  • Day 1 GMT – (All) G20 Meetings
  • 01:30 PM GMT – (CAD) CPI m/m
  • 01:30 PM GMT – (CAD) Core Retail Sales m/m
  • 01:30 PM GMT – (CAD) Common CPI y/y
  • 01:30 PM GMT – (CAD) Median CPI y/y
  • 01:30 PM GMT – (CAD) Retail Sales m/m
  • 01:30 PM GMT – (CAD) Trimmed CPI y/y

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