Thursday 23rd May: China loses on trade, India gains on election results

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Thursday 23rd May: China loses on trade, India gains on election results 1

Global Markets:

  • Asian Stock Markets : Nikkei down 0.62%, Shanghai Composite down 1.19%, Hang Seng down 1.66%, ASX down 0.29%
  • Commodities : Gold at $1273.65 (-0.04%), Silver at $14.44 (-0.04%), Brent Oil at $70.36 (-0.89%), WTI Oil at $60.88 (-0.88%)
  • Rates : US 10-year yield at 2.378, UK 10-year yield at 1.008, Germany 10-year yield at -0.092

News & Data:

  • (CAD) Retail Sales m/m 1.10% vs 0.80% expected
  • (CAD) Core Retail Sales m/m 1.70% vs 0.80% expected
  • (GBP) Public Sector Net Borrowing 5.0B vs 5.2B expected
  • (GBP) PPI Input m/m 1.10% vs 1.10% expected
  • (GBP) CPI y/y 2.10% vs 2.20% expected
  • Indian stock indexes hit record highs as election trends show PM Modi winning a second term
  • BoJ Deputy Governor: Liquidity Has Been Falling For Certain JGBS – Was Appropriate To Take Steps To Improve JDB Liquidity

Markets Update:

Asian stocks were mostly lower on Thursday as investors fretted about the adverse effects of trade tensions on global economic growth. The United Nations (UN) cut its predictions for global economic growth in 2019 and 2020, citing unresolved trade tensions.

A report from the South China Morning Post said China is re-examining the entire bilateral economic relationship between the U.S. and China. Separately, U.S. Treasury Secretary Steven Mnuchin told CNBC’s Ylan Mui the U.S. has no plans to go to Beijing to resume trade negotiations.

Mainland Chinese shares slipped by the afternoon, as the Shanghai composite declined 1.2% and the Shenzhen component fell 2.4%. Hong Kong’s Hang Seng index also declined 1.7%. Elsewhere, the Nikkei 225 in Japan slipped 0.6% in morning trade.

Shares of index heavyweight and conglomerate Softbank Group plunged more than 5% after sources told Reuters that U.S. Justice Department staff have recommended blocking a deal between T-Mobile and rival Sprint. In South Korea, the Kospi fell 0.2%, while Australia’s ASX 200 declined 0.3%.

In currencies, constant trade friction saw the safe haven yen in demand again as the dollar dipped to 110.24 yen and away from the week’s top of 110.67. In commodity markets, spot gold was little changed at $1,273.12 per ounce.

Oil prices added to losses suffered overnight after an unexpected build in U.S. crude inventories compounded investor worries about demand.

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