Wednesday 8th August: Asian Markets Modestly Higher on earnings, China stimulus hopes

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IC Markets Market Review
IC Markets Market Review

Global Markets:

  • Asian Stock Markets : Nikkei up 0.01%, Shanghai Composite down 0.39%, Hang Seng up 0.51%, ASX up 0.23%
  • Commodities : Gold at $1222.60 (+0.35%), Silver at $15.45 (+0.47%), Brent Oil at $74.64 (-0.01%), WTI Oil at $69.28 (+0.16%)
  • Rates : US 10-year yield at 2.971, UK 10-year yield at 1.327, Germany 10-year yield at 0.409

News & Data:

  • (CNY) Trade Balance 177B vs 229B expected
  • (NZD) Inflation Expectations q/q 2.00% vs 2.00% previous
  • (NZD) GDT Price Index 0.00% vs -1.70% previous
  • (CAD) Ivey PMI 61.8 vs 64.2 expected
  • (GBP) Halifax HPI m/m 1.40% vs 0.20% expected
  • (AUD) Cash Rate 1.50% vs 1.50% expected
  • RBA’s Lowe: Board sees no strong case for near-term rate move
  • China’s July trade data (USD): Surplus narrows to 28.05bn, misses estimates
  • Trump says GDP growth ‘could be in the 5s’ next quarter

Markets Update:

Asian stock markets are mostly higher on Wednesday after U.S. stocks extended gains overnight as upbeat corporate earnings results helped offset worries about rising U.S.-China trade tensions. Expectations of increased Chinese government spending on infrastructure also boosted sentiment. However, gains are modest in most markets.

The Japanese market is mixed, as the positive lead from Wall Street as upbeat corporate earnings results helped offset worries about rising trade tensions between the U.S. and China. South Korean stocks also traded higher, with the Kospi adding 0.27 percent.

In Australia, the S&P/ASX 200 was up 0.20 percent, with gains in the heavily weighted financials sub-index buoying the broader benchmark. Bucking the trend were Chinese shares, which slipped about 0.35 percent after the United States said it would begin collecting 25 percent tariffs on an additional $16 billion worth of Chinese goods this month, the second leg of its first China-targeted tariffs on $50 billion goods. Elsewhere, Hong Kong’s Hang Seng Index edged higher by 0.31 percent. Energy-linked stocks traded higher, extending sharp gains seen on Tuesday, with conglomerates and technology names also buoyant.

In the foreign exchange market, major currencies kept to tight ranges. The euro was at $1.1599, off Monday’s five-week low of $1.1530. The yen stood little changed at 111.38 per dollar while worries about a hard Brexit kept the sterling at $1.2938, just above its 11-month trough of $1.2920 set on Monday.

The Chinese yuan was little changed, keeping some distance from its 15-month lows hit last week as the central bank on Friday took steps to curb bets against the currency by raising the cost for investors to short the yuan.

Upcoming Events:

  • 01:45 PM GMT – (USD) FOMC Member Barkin Speaks
  • 03:30 PM GMT – (USD) Crude Oil Inventories
  • 10:00 PM GMT – (NZD) Official Cash Rate
  • 10:00 PM GMT – (NZD) RBNZ Monetary Policy Statement
  • 10:00 PM GMT – (NZD) RBNZ Rate Statement
  • 11:00 PM GMT – (NZD) RBNZ Press Conference

 

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