Tuesday 30th July: Asian markets gain after BoJ announcement, ahead of Sino-US talks

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Global Markets:

  • Asian Stock Markets : Nikkei up 0.46%, Shanghai Composite up 0.40%, Hang Seng up 0.29%, ASX up 0.35%
  • Commodities: Gold at $1423.10 (+0.19%), Silver at $16.45 (+0.05%), Brent Oil at $64.03 (+0.64%), WTI Oil at $57.27 (+0.70%)
  • Rates : US 10-year yield at 2.060, UK 10-year yield at 0.652, Germany 10-year yield at -0.396

News & Data:

  • (AUD) HIA New Home Sales m/m -12.40% vs 28.80% previous
  • (EUR) Spanish Flash CPI y/y 0.50% vs 0.60% expected
  • (GBP) M4 Money Supply m/m 0.10% vs 0.20% expected
  • (GBP) Mortgage Approvals 66K vs 66K expected
  • (GBP) Net Lending to Individuals m/m 4.8B vs 4.4B expected
  • (NZD) Building Consents m/m -3.90% vs 13.50% previous
  • (JPY) Unemployment Rate 2.30% vs 2.40% expected
  • (JPY) Prelim Industrial Production m/m -3.60% vs -1.80% expected
  • (AUD) Building Approvals m/m -1.20% vs 0.20% expected
  • (JPY) BOJ Policy Rate -0.10% vs -0.10% expected
  • (EUR) French Flash GDP q/q 0.20% vs 0.30% expected
  • Yen trades near three-week low before BOJ, Fed meetings

Markets Update:

Asian stocks gained on Tuesday as equity investors prepared for an expected U.S. interest rate cut this week while the pound retreated to a 28-month low as heightened concerns about a no-deal Brexit gripped currency markets.

The U.S. Federal Reserve begins a two-day policy meeting later on Tuesday, at which it is widely expected to lower interest rates by 25 basis points. If implemented, it would be the central bank’s first rate cut in a decade. Also drawing some attention were U.S.-China trade negotiations due to begin in Shanghai on Tuesday.

The Shanghai Composite Index rose 0.4% ahead of US-China trade talks, while Hang Seng traded 0.3% I positive. Japan’s Nikkei (N225) was up 0.7%, showing little reaction after the Bank of Japan left monetary policy unchanged as expected on Tuesday. Australian stocks climbed as much as 0.35%, supported by buoyant mining shares and adding to the previous day’s tech-driven gains.

In currencies, the pound extended an overnight slump and fell to $1.2164, its lowest level since March 2017. The dollar index against a basket of six major currencies was a shade higher at 98.106 while the yen was slightly firmer at 108.725 per dollar, with the BOJ’s policy decision having little impact.

Crude oil prices added to the previous day’s gains, when stronger-than-expected U.S. GDP strengthened the outlook for oil consumption by the world’s largest economy. Gold prices rose on Tuesday in Asia ahead of an expected rate cut by the U.S. Federal Reserve.

Upcoming Events:

  • Tentative – (JPY) BOJ Outlook Report
  • Tentative – (JPY) Monetary Policy Statement
  • Tentative – (JPY) BOJ Press Conference
  • All Day – (EUR) German Prelim CPI m/m
  • 01:30 PM GMT – (USD) Core PCE Price Index m/m
  • 01:30 PM GMT – (USD) Personal Spending m/m
  • 03:00 PM GMT – (USD) CB Consumer Confidence
  • &more…

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