Monday 6th May: Asian markets plunge on trade tensions

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Monday 6th May: Asian markets plunge on trade tensions 1

Global Markets:

  • Asian Stock Markets : Shanghai Composite down 6.35%, Hang Seng down 3.38%, ASX down 0.85%
  • Commodities : Gold at $1283.35 (+0.16%), Silver at $14.88 (-0.67%), Brent Oil at $69.27 (-2.23%), WTI Oil at $60.49 (-2.34%)
  • Rates : US 10-year yield at 2.523, UK 10-year yield at 1.217, Germany 10-year yield at -0.003

News & Data:

  • (USD) ISM Non-Manufacturing PMI 55.5 vs 57.2 expected
  • (USD) Unemployment Rate 3.60% vs 3.80% expected
  • (USD) Non-Farm Employment Change 263K vs 181K expected
  • (USD) Average Hourly Earnings m/m 0.20% vs 0.30% expected
  • (EUR) Core CPI Flash Estimate y/y 1.20% vs 1.00% expected
  • (EUR) CPI Flash Estimate y/y 1.70% vs 1.60% expected
  • (GBP) Services PMI 50.4 vs 50.4 expected
  • (AUD) Building Approvals m/m -15.50% vs -12.50% expected
  • Caixin China General Services PMI – Business activity growth remains strong in April
  • Chinese Vice Premier Liu He has cancelled his trip to Washington this week for trade talks following a tweet by President Donald Trump

CFTC Positioning Data:

  • EUR short 105K vs 105K short last week. Unchanged
  • GBP short 5K vs 2K short last week. Shorts increased by 3K
  • JPY short 100K vs 94K short last week. Shorts increased by 6K
  • CHF short 40k vs 38k short last week. Shorts increased by 2K
  • AUD short 59k vs 50k short last week. Shorts increased by 9K
  • NZD short 11K vs 5K short last week. Shorts increased by 6K
  • CAD short 47K vs 47K short last week. Unchanged

Markets Update:

Asian stock markets are in negative territory on Monday with some of the markets sharply lower, while the U.S. stock futures also fell, as the positive cues from Wall Street on Friday following upbeat U.S. jobs data for the month of April was more than offset by renewed worries about U.S.-China trade talks. President Donald Trump said on Sunday that the U.S. will hike tariffs on $200 billion worth of Chinese goods this week, with further tariffs “shortly”. In addition, the Wall Street Journal reported that China is considering cancelling the trade talks due to Trump’s latest threats.

Markets in Japan and South Korea are closed on Monday for holidays. The mainland Chinese markets plunged in afternoon trade. The Shanghai composite, Shenzhen composite and Shenzhen component all plunged more than 6% each.

Over in Hong Kong, the Hang Seng index slipped 3.4%. Hong Kong-listed shares of Chinese telecommunications equipment company ZTE plummeted more than 9%, with the company being caught in the crossfire as Beijing and Washington spar over trade.

The flight from riskier assets boosted interest in safe havens, pushing U.S. Treasury futures up 22 ticks. Data from CME Group showed the market now sees a nearly 59 percent chance of a Federal Reserve rate cut by the end of the year. Chinese 10-year treasury futures also jumped, with the most-traded contract, for June delivery rising as much as 0.5 percent.

In commodity markets, Trump’s tweets sparked a plunge in oil prices. U.S. crude at one point dropped as much as 3.1 percent to a more-than-five-week low, before bouncing to $60.44 per barrel – still off 2.4 percent on the day.

Upcoming Events:

Monday, May 06, 2019

  • 02:45 AM GMT – (CNY) Caixin Services PMI
  • 03:00 PM GMT – (USD) FOMC Member Williams Speaks
  • 06:45 PM GMT – (CAD) BOC Gov Poloz Speaks

Tuesday, May 07, 2019

  • 02:30 AM GMT – (AUD) Retail Sales m/m
  • 02:30 AM GMT – (AUD) Trade Balance
  • 04:00 AM GMT – (NZD) Inflation Expectations q/q
  • 05:30 AM GMT – (AUD) Cash Rate
  • 05:30 AM GMT – (AUD) RBA Rate Statement
  • 09:00 AM GMT – (GBP) MPC Member Cunliffe Speaks
  • 10:00 AM GMT – (EUR) EU Economic Forecasts
  • 03:00 PM GMT – (CAD) Ivey PMI
  • 04:35 PM GMT – (USD) FOMC Member Quarles Speaks
  • 05:30 PM GMT – (GBP) MPC Member Haldane Speaks

Wednesday, May 08, 2019

  • 03:00 AM GMT – (NZD) Official Cash Rate
  • 03:00 AM GMT – (NZD) RBNZ Monetary Policy Statement
  • 03:00 AM GMT – (NZD) RBNZ Rate Statement
  • 04:00 AM GMT – (NZD) RBNZ Press Conference
  • Tentative – (CNY) Trade Balance
  • 09:15 AM GMT – (GBP) MPC Member Ramsden Speaks
  • 12:30 PM GMT – (EUR) ECB Monetary Policy Meeting Accounts
  • 01:30 PM GMT – (USD) FOMC Member Brainard Speaks

Thursday, May 09, 2019

  • 02:30 AM GMT – (CNY) CPI y/y
  • 01:30 PM GMT – (CAD) Trade Balance
  • 01:30 PM GMT – (USD) Fed Chair Powell Speaks
  • 01:30 PM GMT – (USD) PPI m/m
  • 01:30 PM GMT – (USD) Core PPI m/m
  • Tentative – (USD) Treasury Currency Report

Friday, May 10, 2019

  • 02:30 AM GMT – (AUD) RBA Monetary Policy Statement
  • 09:30 AM GMT – (GBP) GDP m/m
  • 09:30 AM GMT – (GBP) Manufacturing Production m/m
  • 09:30 AM GMT – (GBP) Prelim GDP q/q
  • 09:30 AM GMT – (GBP) Prelim Business Investment q/q
  • 01:30 PM GMT – (CAD) Employment Change
  • 01:30 PM GMT – (CAD) Unemployment Rate
  • 01:30 PM GMT – (USD) CPI m/m
  • 01:30 PM GMT – (USD) Core CPI m/m
  • 01:30 PM GMT – (USD) FOMC Member Brainard Speaks
  • &more…

 

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