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Markets Update: APAC Stocks Mostly Lower After Post-CPI Dovish Unwinding Country Garden drops below HK$1/share amid losses and restructuring speculation; CN LGFV bailout talk persists
Economic Calendar
Global Markets Roundup: 11 Aug 2023
Asian stocks traded mostly lower on Friday, following the post-CPI dovish unwinding seen stateside, Chinese property concerns, and holiday-thinned conditions. The Nikkei 225 fell by 0.6%, the Hang Seng Index fell by 1.4%, and the Shanghai Composite fell by 0.3%.
European Equity Futures Indicative of a Lower Open
European equity futures are indicative of a lower open with the Euro Stoxx 50 -0.6% after the cash market closed up by 1.6% on Friday. Investors are awaiting the release of key economic data from the US, including the Producer Price Index (PPI) and the University of Michigan Consumer Confidence Index (UoM).
DXY Contains Just Above the 102.50 Mark, USD/JPY Eyes 145, EUR/USD Sits Just Below 1.10 The US dollar index (DXY) is contained just above the 102.50 mark, as investors await the release of key economic data from the US. The Japanese yen (JPY) is trading near its weakest level in two decades against the US dollar, as the Bank of Japan (BoJ) continues to defend its ultra-loose monetary policy. The euro (EUR) is trading just below 1.10 against the US dollar, as investors remain concerned about the economic outlook for the eurozone.
ASX 200 Lacklustre
The Australian stock market was lacklustre on Friday, with the ASX 200 closing down by 0.2%. The upside in consumer stocks was negated by the losses in the commodity-related sectors, while RBA Governor Lowe's testimony provided very little in the way of fresh insight. Lowe reiterated that further tightening may be required, but did not provide any specific timeline or details.
Hang Seng and Shanghai Comp Declined
The Hong Kong and Shanghai stock markets declined on Tuesday, with the Hang Seng Index closing down by 1.1% and the Shanghai Composite Index closing down by 0.8%. Developers were pressured after Country Garden flagged a loss of up to CNY 55 billion for H1 and hired CICC for debt restructuring. Shares in Fantasia Holdings dropped more than 50% on resumption of trade after being halted since March last year, while participants await details from the securities regulator's emergency meeting with developers and financial institutions.
Alibaba, China Mobile and Li Ning Top Performers Conversely, Alibaba, China Mobile and Li Ning were among the best performers in Hong Kong following their results. Alibaba beat on top and bottom lines, while China Mobile reported its highest quarterly profit in over a decade. Li Ning saw a 50% increase in revenue in the first quarter, driven by strong demand for its sportswear products.
FX
The US dollar index (DXY) was marginally softer, but price action was contained within a tight range and back to within close proximity of the 102.50 level after the dust settled from the recent US CPI data and treasury selling.
The euro (EUR) traded flat, taking a breather following yesterday's roundtrip journey into 1.1000 territory.
The British pound (GBP) languished beneath the 1.2700 handle as the attention turned to the incoming UK GDP data.
The Japanese yen (JPY) was quiet amid the holiday in Japan but held onto gains after approaching closer towards 145.00.
The Australian dollar (AUD) and New Zealand dollar (NZD) were lacklustre owing to the subdued risk appetite and with NZD/USD pressured following the contractions in New Zealand PMI and food inflation.
The People's Bank of China (PBoC) set the USD/CNY mid-point at 7.1587 versus the expected 7.2193 (previous 7.1576).
FIXED INCOME
10-year US Treasury futures were subdued following the prior day's slump despite the softer-than-expected CPI data and after selling was further exacerbated by the lacklustre 30-year auction.
Bund futures remained pressured and extended on lows after breaching 132.00 to the downside.
COMMODITIES
Crude oil futures were little changed during Asian trade after succumbing to the post-CPI dovish unwind.
Saudi Arabia is reportedly in advanced talks for a USD 14 billion refinery in Pakistan and is negotiating regarding a stake in a giant copper mine in Pakistan, according to the Wall Street Journal citing sources.
Spot gold was uneventful as price action largely reflected the flat dollar performance.
Copper futures languished at the prior day's lows amid ongoing Chinese developer woes.
Looking Ahead Highlights include:
French Unemployment Rate
UK GDP
Trade Balance
US PPI
UoM (Prelim)
Speeches from RBA's Lowe, Bullock & Kohler.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team
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