
Markets Update: APAC Stocks Mixed as China's LPR Decisions Erode Recent Gains - China PBOC disappoints with smaller LPR cuts than expected; Hang Seng falls deeper into bear territory and CN Yuan again pushes towards 15-yr lows; FDI is leaving China; China gov’t promises more support (again), but no specifics (again);
Economic Calendar
Global Markets Roundup: 21 Aug 2023
APAC Stocks Mixed as China's LPR Decisions Overshadow Recent Support Efforts
Asian stocks traded mixed on Monday, as the disappointment from China's decision on its loan prime rates (LPRs) overshadowed its recent support efforts.
The People's Bank of China (PBoC) opted for a narrower-than-expected cut to the 1-year LPR, from 3.7% to 3.65%, and a surprise hold on the 5-year LPR, which is the reference rate for mortgages.
The decision was seen as a disappointment by investors, who had expected a larger cut to the 1-year LPR in order to support the Chinese economy, which is facing headwinds from a slowdown in growth and rising inflation.
The Hong Kong stock market underperformed, as investors reacted negatively to the LPR decisions. The Hang Seng Index fell 0.5%.
US equity futures traded sideways and were only briefly fazed by China's benchmark rate disappointment. European equity futures are indicative of a flat open.
In other news, unions at Woodside Energy's North West Shelf offshore gas platforms on Sunday announced plans to strike as early as September 2nd. The strike would affect production at the platforms, which are located off the coast of Australia.
The Australian stock market (ASX 200) was lacklustre, with price action contained amid a busy week of earnings and as weakness in financials and defensives offset the gains in energy and tech.
The Japanese stock market (Nikkei 225) was underpinned after the government announced to raise the minimum hourly wage by the most on record.
The Hong Kong stock market (Hang Seng) and the Chinese stock market (Shanghai Composite) were pressured, as investors reacted negatively to the LPR decisions.
US equity futures traded sideways and were only briefly fazed by China's benchmark rate disappointment. European equity futures are indicative of a flat open.
In other news, unions at Woodside Energy's North West Shelf offshore gas platforms on Sunday announced plans to strike as early as September 2nd. The strike would affect production at the platforms, which are located off the coast of Australia.
FX Space
The dollar traded rangebound, with upside limited by resistance near the 103.50 level.
The euro eked slight gains in quiet trade and with the single currency stuck at a sub-1.0900 level.
The pound lacked firm direction with the latest Rightmove House price data showing asking prices for UK homes suffered a 1.9% Y/Y drop in August.
The Japanese yen was choppy amid the mixed risk appetite and absence of pertinent data releases.
The Australian dollar and New Zealand dollar were somewhat indecisive following the mixed signals from China's central bank.
Fixed Income
10-year Treasury futures were subdued as yields marginally edged higher and as markets await clues on monetary policy from Fed Chair Powell's speech at Jackson Hole on Friday.
Bund futures continued their mild pullback from Friday's peak amid the lack of direct catalysts.
10-year JGB futures tracked the losses in global peers after Japan announced a record minimum wage increase and lack of additional BoJ purchases.
Commodities
Crude futures were underpinned in an extension of Friday's gains and as unions in Australia threatened disruption for the energy complex with strike action as early as September 2nd if their bargaining claims are not met by Wednesday.
Spot gold remained indecisive beneath the psychologically key USD 1900/oz level amid a flat dollar.
Copper futures were choppy as China's support efforts were nullified by LPR-related disappointment.
Looking ahead, highlights include German PPI, Bundesbank Monthly Report, and earnings from Zoom Video Communications.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team