Thursday 15th August: Asian markets tumble on growing recession fears

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Global Markets:

  • Asian Stock Markets : Nikkei down 1.29%, Shanghai Composite up 0.16%, Hang Seng up 0.23%, ASX down 2.85%
  • Commodities: Gold at $1527.55 (-0.02%), Silver at $17.23 (-0.31%), Brent Oil at $59.30 (-0.30%), WTI Oil at $55.22 (-0.02%)
  • Rates : US 10-year yield at 1.559, UK 10-year yield at 0.444, Germany 10-year yield at -0.661

News & Data:

  • (EUR) Flash Employment Change q/q 0.20% vs 0.30% expected
  • (GBP) RPI y/y 2.80% vs 2.80% expected
  • (GBP) PPI Output m/m 0.30% vs 0.10% expected
  • (GBP) HPI y/y 0.90% vs 1.00% expected
  • (GBP) Core CPI y/y 1.90% vs 1.80% expected
  • (GBP) PPI Input m/m 0.90% vs 0.60% expected
  • (GBP) CPI y/y 2.10% vs 1.90% expected
  • (EUR) French Final CPI m/m -0.20% vs -0.20% expected
  • (EUR) German Prelim GDP q/q -0.10% vs -0.10% expected
  • (CNY) Unemployment Rate 5.30% vs 5.10% previous
  • (CNY) Retail Sales y/y 7.60% vs 8.60% expected
  • (CNY) Industrial Production y/y 4.80% vs 6.00% expected
  • (CNY) Fixed Asset Investment ytd/y 5.70% vs 5.90% expected
  • (AUD) Wage Price Index q/q 0.60% vs 0.50% expected
  • (AUD) Westpac Consumer Sentiment 3.60% vs -4.10% previous
  • (EUR) Flash GDP q/q 0.20% vs 0.20% expected
  • (EUR) Industrial Production m/m -1.60% vs -1.40% expected
  • (USD) Import Prices m/m 0.20% vs 0.00% expected
  • (USD) Crude Oil Inventories 1.6M vs -2.5M expected
  • (AUD) MI Inflation Expectations 3.50% vs 3.20% previous
  • (AUD) Employment Change 41.1K vs 14.2K expected
  • (AUD) Unemployment Rate 5.20% vs 5.20% expected
  • (JPY) Revised Industrial Production m/m -3.30% vs -3.60% expected

Markets Update:

Asian markets fell in early trading Thursday, following Wall Street’s worst day of the year amid signals of recession. Investors fear a historic drop in long-term U.S. bond yields could prove a herald of recession globally. The yield on the closely watched 10-year Treasury fell so low Wednesday that, for the first time since 2007, it briefly crossed a threshold that has correctly predicted many past recessions. Weak economic data from Germany and China added to recent signals of a global slowdown.

Asian indices are currently mixed, after rising from session lows. Japan’s Nikkei is still down 1.29% but up from early lows while Hong Kong’s Hang Seng is in positive territory by 0.23% after sharply recovering from early losses. The Shanghai Composite eased a relatively modest 0.16%. Australian ASX fell steeply by 2.85% even as Australia added a stronger-than-expected 41,000 jobs in July, rebounding from the previous month’s contraction.

The yield on the 10-year Treasury dropped from 2.02% on July 31 to below 1.60%. On Wednesday, it briefly fell below the two-year Treasury’s yield for the first time since 2007. Major currencies were relatively calm, with the yen gaining just a little from its status as a safe harbour. The dollar was last at 105.85 yen having fallen 0.8% overnight form a top of 106.77.

The threat to global demand took a heavy toll on oil prices, with Brent crude losing another 0.3% to $59.30 a barrel. WTI is flat at $55.22 after shedding 0.02%. Safe-haven gold gained to $1,527.55 per ounce, not far from its highest since April 2013.

Upcoming Events:

  • 12:30 pm GMT – (CAD) ADP Non-Farm Employment Change
  • 12:30 pm GMT – (USD) Core Retail Sales m/m
  • 12:30 pm GMT – (USD) Philly Fed Manufacturing Index
  • 12:30 pm GMT – (USD) Retail Sales m/m
  • 12:30 pm GMT – (USD) Empire State Manufacturing Index
  • 12:30 pm GMT – (USD) Prelim Nonfarm Productivity q/q
  • 12:30 pm GMT – (USD) Prelim Unit Labor Costs q/q
  • 12:30 pm GMT – (USD) Unemployment Claims
  • 1:15 pm GMT – (USD) Capacity Utilization Rate
  • 1:15 pm GMT – (USD) Industrial Production m/m
  • 2:00 pm GMT – (USD) Business Inventories m/m
  • 2:00 pm GMT – (USD) NAHB Housing Market Index
  • 2:30 pm GMT – (USD) Natural Gas Storage
  • 8:00 pm GMT – (USD) TIC Long-Term Purchases
  • 10:30 pm GMT – (NZD) Business NZ Manufacturing Index
  • &more…

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