Tuesday 16th October: Asian markets mixed – China not like to be named currency manipulator

Narayan Joshi No Comments

Global Markets:

  • Asian Stock Markets : Nikkei up 1.14%, Shanghai Composite down 0.83%, Hang Seng down 0.86%, ASX up 0.56%
  • Commodities : Gold at $1231.00 (+0.06%), Silver at $14.69 (-0.25%), Brent Oil at $80.64 (-0.17%), WTI Oil at $71.56 (-0.31%)
  • Rates : US 10-year yield at 3.175, UK 10-year yield at 1.607, Germany 10-year yield at 0.517

News & Data:

  • (CNY) CPI y/y 2.50% vs 2.50% expected
  • (NZD) CPI q/q 0.90% vs 0.70% expected
  • (USD) Retail Sales m/m 0.10% vs 0.70% expected
  • (USD) Core Retail Sales m/m -0.10% vs 0.40% expected
  • Japan says U.S. has not raised forex manipulation in trade talks
  • RBA Sees Lower Currency Supporting Growth, Rates Staying on Hold
  • ECB still set to turn off QE taps despite cocktail of risks: Reuters poll

Markets Update:

Asian stock markets are mixed on Tuesday with markets attempting a rebound after recording losses in the previous session, despite the weak cues overnight from Wall Street and as investors shift focus to upcoming corporate earnings results. Nevertheless, gains are modest in most markets amid worries about higher oil prices following rising tensions between Saudi Arabia and the West over the disappearance of prominent Saudi journalist Jamal Khashoggi earlier this month.

The Japanese market is higher, with a weaker yen lifting shares of exporters. The Nikkei advanced 1.15%, after hitting eight-week lows on Monday. The Greater China markets lost their earlier gains to land in negative territory in the afternoon. Both the Hong Kong's Hang Seng and the Shanghai composite shed 0.85 percent and the Shenzhen composite declined by 1.85 percent. South Korea's Kospi traded largely flat in the afternoon. The ASX 200 traded higher by 0.56 percent in the afternoon, with most sectors trending higher.

Data on Tuesday showed China's factory-gate inflation cooled for a third straight month in September amid ebbing domestic demand, pointing to more pressure on the world's second biggest economy as it remains locked in an intensifying trade war with the United States. Amid the tentative ebb in risk aversion in the broader markets, perceived safe havens such as the Japanese yen and Swiss franc handed back some of their recent gains. Currency market focus was on the U.S. Treasury's semiannual currency report due later in the day, with investors waiting to see Washington's view on China after media reports last week that the department has not labeled Beijing a currency manipulator.

In commodities, tension between the United States, the world's top oil consumer, and Saudi Arabia, one of the biggest producers, pushed up crude prices on concerns about supply.

Upcoming Events:

  • 09:30 AM GMT – (GBP) Average Earnings Index 3m/y
  • 09:30 AM GMT – (GBP) Unemployment Rate
  • 01:30 PM GMT – (CAD) Foreign Securities Purchases
  • 02:15 PM GMT – (GBP) MPC Member Cunliffe Speaks
  • 09:15 PM GMT – (USD) FOMC Member Daly Speaks
  • 10:20 PM GMT – (AUD) RBA Assist Gov Debelle Speaks
  • &more…