Wednesday 9th October: Asian markets retreat amid growing pessimism over trade talks

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Global Markets:

  • Asian Stock Markets : Nikkei down 0.69%, Shanghai Composite up 0.20%, Hang Seng down 0.46%, ASX down 0.71%
  • Commodities: Gold at $1511.55 (+0.51%), Silver at $17.82 (+0.65%), Brent Oil at $58.19 (-0.09%), WTI Oil at $52.58 (-0.10%)
  • Rates : US 10-year yield at 1.536, UK 10-year yield at 0.407, Germany 10-year yield at -0.581

News & Data:

  • (USD) PPI m/m -0.30% vs 0.10% expected
  • (USD) Core PPI m/m -0.30% vs 0.20% expected
  • (CAD) Building Permits m/m 6.10% vs 2.30% expected
  • (CAD) Housing Starts 221K vs 217K expected
  • (USD) NFIB Small Business Index 101.8 vs 102.6 expected
  • (EUR) Italian Retail Sales m/m -0.60% vs -0.10% expected
  • (EUR) French Trade Balance -5.02B vs -4.23B expected
  • (EUR) German Industrial Production m/m 0.30% vs -0.20% expected
  • (CHF) Unemployment Rate 2.30% vs 2.10% expected
  • (JPY) Economy Watchers Sentiment 46.7 vs 43.4 expected
  • (CNY) Caixin Services PMI 51.3 vs 52.1 expected
  • (AUD) ANZ Job Advertisements m/m 0.30% vs -2.60% previous
  • (AUD) NAB Business Confidence 0 vs 1 previous
  • (USD) IBD/TIPP Economic Optimism 52.6 vs 51.2 expected
  • (AUD) Westpac Consumer Sentiment -5.50% vs -1.70% previous
  • (JPY) Prelim Machine Tool Orders y/y -35.50% vs -37.00% previous

Markets Update:

Asian stocks fell the most in a week on Wednesday as the United States and China’s broadening dispute over trade and foreign policy showed little sign of coming to an end, weighing on global economic growth. The United States and China are engaged in a year-long row that has slowly expanded beyond trade policy, suggesting even more damage to an already fragile global economy.

Japan’s Nikkei slid 0.69%, its biggest decline in a week. Hong Kong shares fell 0.68% and rebounded to 0.46% due to persistent worries about often violent protest against China’s rule of the former British colony. The Shanghai Composite inched up slightly by 0.2%, while the ASX 200 slipped 0.7%.

The U.S. Treasury yield curve steepened after U.S. Federal Reserve Chair Jerome Powell signalled further interest rate cuts and the resumption of bond purchases to address a recent spike in money markets rates. The spread between two-year and 10-year Treasuries, the most common definition of the yield curve, widened to 11.3 basis points.

Oil prices extended declines as U.S. visa restrictions on Chinese officials and the addition of more Chinese companies to a U.S. trade blacklist weighed on already slim hopes that Washington and Beijing could reach a truce at trade negotiations this week. Brent oil fell 0.09% to $58.19 per barrel. A larger-than-expected increase in U.S. crude inventories added to fears that the global oil market will continue to struggle with excess supply.

The dollar index was little changed at 99.095. The euro traded at $1.0962, and the yen fell slightly to 107.15 per dollar. Gold prices rose to $1511.55 an ounce on Wednesday in Asia as uncertainties surrounding the Sino-U.S. trade war and gloomy Brexit headlines dented investor sentiment.

Upcoming Events:

  • 8:30 am GMT – (GBP) FPC Statement
  • All Day – (EUR) Eurogroup Meetings
  • 2:00 pm GMT – (USD) Final Wholesale Inventories m/m
  • 2:00 pm GMT – (USD) JOLTS Job Openings
  • 2:30 pm GMT – (USD) Crude Oil Inventories
  • 3:00 pm GMT – (USD) Fed Chair Powell Speaks
  • 3:00 pm GMT – (USD) FOMC Member George Speaks
  • 5:01 pm GMT – (USD) 10-y Bond Auction
  • 6:00 pm GMT – (USD) FOMC Meeting Minutes
  • Tentative – (USD) Treasury Currency Report
  • 9:45 pm GMT – (NZD) FPI m/m
  • 11:01 pm GMT – (GBP) RICS House Price Balance
  • 11:50 pm GMT – (JPY) Bank Lending y/y
  • 11:50 pm GMT – (JPY) Core Machinery Orders m/m
  • 11:50 pm GMT – (JPY) PPI y/y
  • &more…


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