Friday 9th August: Asian markets mixed; focus on Japan GDP and China Inflation data

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Global Markets:

  • Asian Stock Markets : Nikkei up 0.44%, Shanghai Composite down 0.64%, Hang Seng down 0.33%, ASX up 0.25%
  • Commodities: Gold at $1513.95 (+0.29%), Silver at $16.97 (+0.19%), Brent Oil at $57.52 (+0.24%), WTI Oil at $52.67 (+0.25%)
  • Rates : US 10-year yield at 1.704, UK 10-year yield at 0.530, Germany 10-year yield at -0.588

News & Data:

  • (CNY) CPI y/y 2.80% vs 2.70% expected
  • (JPY) Prelim GDP q/q 0.40% vs 0.10% expected
  • (JPY) Prelim GDP Price Index y/y 0.40% vs 0.30% expected
  • (JPY) M2 Money Stock y/y 2.40% vs 2.30% expected
  • (NZD) Visitor Arrivals m/m -0.20% vs -0.20% previous
  • (USD) 30-y Bond Auction 2.34|2.2 vs 2.64|2.1 previous
  • (USD) Natural Gas Storage 55B vs 61B expected
  • (USD) Final Wholesale Inventories m/m 0.00% vs 0.20% expected
  • (USD) Unemployment Claims 209K vs 215K expected
  • (CAD) NHPI m/m -0.10% vs 0.00% expected
  • (JPY) Economy Watchers Sentiment 41.2 vs 44 previous
  • (CNY) USD-Denominated Trade Balance 45.1B vs 43.2B expected
  • (CNY) Trade Balance 310B vs 310B expected
  • (CNY) PPI y/y -0.30% vs 0.00% expected
  • (CHF) Unemployment Rate 2.30% vs 2.30% expected
  • (EUR) German Trade Balance 18.1B vs 18.5B expected
  • BOJ Cuts Mid-, Longer-End JGB Buys, Ups Short-End
  • S. holds off on Huawei licenses after China halts crop buying

Markets Update:

Asian markets were mixed in early trading Friday after Japan’s GDP grew, but so did China’s inflation. New data showed Japan’s economy grew at a faster-than-expected pace in the June-ended second quarter. China’s central bank set the yuan’s daily midpoint above 7 per U.S. dollar for the second straight day. Still, the reference point of 7.0136 yuan per dollar was stronger than analysts’ estimates, and reassured investors that China is not seeking an all-out currency war. Asian shares finally caught the tail of a Wall Street rally, but fresh concerns about Sino-U.S. trade ties capped the region’s gains.

Asian markets are mixed as Japan’s GDP beats forecast and China’s yuan remains stable. Japan’s Nikkei gained 0.44%, after data showed the country’s economy grew 1.8% year-on-year in April-June, much better than the expected 0.4% growth. Australian stocks added 0.25% while Chinese stocks saw early gains evaporate in spite of Yuan stabilization.

The benchmark Shanghai Composite is down 0.6%. Hang Seng, too, gave up early gains and shed 0.2% as the political crisis in Hong Kong returned to focus as thousands of protesters plan to rally at the Hong Kong International Airport on Friday afternoon.

The rally, which pushed the Dow Jones Industrial Average up by more than 370 points, followed an early rise in bonds yields after a weekly government report on unemployment claims came in better than economists had expected. Benchmark 10-year Treasury yield closed 2.4 basis points higher at 1.704% after hitting 1.595% on Wednesday, which was its lowest level since October 2016. The yen strengthened as much as 0.4% against the dollar to 105.70 yen on worries triggered by the report on Huawei.

In commodity markets, oil prices on Friday gave up some the previous day’s stellar gains, but expectations of more production cuts by OPEC were expected the underpin prices. Brent crude retreated 0.24% to $57.52 per barrel and U.S. West Texas Intermediate (WTI) crude eased 0.25% to $52.67. Spot gold held near a more than six-year peak, with rising to $1,513.95 an ounce as investors sought the safety of the precious metal.

Upcoming Events:

  • 8:30 am GMT – (GBP) Manufacturing Production m/m
  • 8:30 am GMT – (GBP) Prelim GDP q/q
  • 8:30 am GMT – (GBP) Construction Output m/m
  • 8:30 am GMT – (GBP) Goods Trade Balance
  • 8:30 am GMT – (GBP) Index of Services 3m/3m
  • 8:30 am GMT – (GBP) Industrial Production m/m
  • 8:30 am GMT – (GBP) Prelim Business Investment q/q
  • 12:15 pm GMT – (CAD) Housing Starts
  • 12:30 pm GMT – (CAD) Employment Change
  • 12:30 pm GMT – (CAD) Unemployment Rate
  • 12:30 pm GMT – (CAD) Building Permits m/m
  • 12:30 pm GMT – (USD) Core PPI m/m
  • 12:30 pm GMT – (USD) PPI m/m
  • Tentative – (GBP) NIESR GDP Estimate
  • &more

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