TradeTheNews.com Asia Mid-Session Market Update: Asian equities and currencies extend sell off amid focus on North Korea and ahead of US CPI data; Asian tech tracks weakness in Nasdaq
Asia Summary
- With Japan closed for holiday, equity markets across Asia have extended the declines seen in the prior session (Hang Seng -1.8%, Kospi -1.6%, Shanghai -1.6%), amid lingering worries related to North Korea, rise in VIX and the over 2.4% decline seen in the Nasdaq in NY trading. As such, technology stocks have underperformed (Tencent -3%, Hynix -4%), along with commodity related names (Rusal -4.5%). Bucking the trend, shares of Noble Group have risen over 10% following its H1 results. Chinese defense companies are also moving higher with North Korea in focus.
- With the weakness in equities and generally “risk-off” sentiment, the Aussie has declined by over 0.40%. RBA Governor Lowe also reiterated his preference for a weaker currency. With the Asian equity weakness and North Korea tensions, Asian currencies are broadly weaker, with the Philippine Peso declining to its lowest level since 2006. The Korean Won has weakened by 0.2%, after the sharp losses seen on Thursday’s session.
- Looking ahead, traders are focusing on the US July CPI figures which are due to be released later today.
Key economic data
- (CN) China July Fiscal Revenues CNY1.65T, +11.1% y/y; Fiscal Spending CNY1.35T, +5.4% y/y
- (KR) South Korea July Export Price Index M/M: 1.0% v -0.2% prior; Y/Y: 8.0% v 4.7% prior
- (SG) SINGAPORE Q2 FINAL GDP Q/Q: 2.2% V 0.5%E; Y/Y: 2.9% V 2.5%E
- (NZ) NEW ZEALAND JULY BUSINESS NZ MANUFACTURING PMI: 55.4 V 56.2 PRIOR
- (NZ) New Zealand REINZ July House Sales Y/Y: -24.5% v -24.7% prior
Speakers and Press
Australia
- (AU) RBA Gov Lowe: Not prepared to intervene at moment, but prepared to intervene in A$ in 'extreme' situations
China
- (CN) China Cybersecurity Authority: Probing Tencent, Baidu, Sina Weibo for violation of cybersecurity laws
- (CN) China said to consider curbs on certain money market fund investments - China Securities Times
Japan
- (JP) Japan readies missile shield following the recent North Korea threat related to Guam - Japanese Press
- (JP) According to Japanese press poll, 64% are against PM Abe serving a third term as LDP Head
Other
- (KR) US Defense Sec Mattis: Diplomatic efforts on North Korea are 'gaining traction'
- (KR) South Korea Ministries held meeting to discuss the economy and markets, to take measures if sees unusual market movements
- (PH) Philippines Central Bank Governor Espenilla: BSP following 'flexible' FX rate policy; Peso (PHP) movement 'modest' and its CPI pass-through is muted
- (SA) Saudi Oil Min Al-Falih: More oil output cuts must be collective
Asian Equity Indices/Futures (00:30ET)
- Nikkei closed for holiday, Hang Seng -1.8%%, Shanghai Composite -1.6%, ASX200 -1.3%, Kospi -1.6%
- Equity Futures: S&P500 -0.1% ; Nasdaq -0.4% , Dax flat , FTSE100 flat
FX ranges/Commodities/Fixed Income (00:30ET)
- EUR 1.1761-1.1777; JPY 108.91-109.22 ; AUD 0.7839-0.7876; NZD 0.7252-0.7283
- Aug Gold +0.1% at 1,291 /oz; Aug Crude Oil -0.3% at $48.47/brl; Sept Copper -0.7% at $2.89/lb
- GLD SPDR Gold Trust ETF daily holdings unchanged at 786.9 tons
- (AU) Australia sells July 2022 Bonds, avg yield 2.1337%, bid to cover 4.69x
- (CN) PBOC SETS YUAN REFERENCE RATE AT: 6.6642 V 6.6770 PRIOR
- (CN) China PBoC OMO injects CNY130B in v CNY90B in 7 and 14-day reverse repo prior
Equities notable movers
Australia
- National Australia Bank, NAB.AU Q3 Cash Profit +5%, general weakness the Australian banking sector; -1.4%
US markets on close: Dow -0.9%, S&P500 -1.5%, Nasdaq -2.1%, Russell -1.8%
- Best Sector in S&P500: Utilities +0.3%
- Worst Sector in S&P500: Technology -2%
- At the close: VIX 16.04 (+4.93 pts); Treasuries: 2-yr 1.34% (-1bp), 10-yr 2.25% (-1bp), 30-yr 2.83% (-2bps)
US Market Summary
- US markets extended their opening losses into the afternoon, after European equities closed at their lowest level since March, as heightened tensions on the Korean peninsula still reverberated globally and Pres Trump made further bellicose remarks on the situation. All sectors except utilities are in the red for the day, with tech sending the Nasdaq to its worst three-day slide since November. Kohl's and Macy's led retail names lower after earnings and guidance. The Dollar weakened throughout the session after PPI data came in lower than expected and NY Fed President Dudley sounded more cautious about the inflation outlook than he did just a couple of months ago. Treasury yields dropped as investors showed appetite for the 30-year bond auction mid-day amidst the geopolitical tensions. The VIX popped to a three-month high, and gold futures are up at their best levels since June.
US Afterhours Movers
- After Market Movers
- AMRS Reports Q2 -$0.46 v -$1.06e, Rev $25.7M v $23.7Me; +11.9% afterhours
- CWH Reports Q2 $0.91 v $0.69e, Rev $1.3B v $1.16Be; +5.7% afterhours
- NVDA Reports Q2 $1.01 v $0.69e, Rev $2.23B v $1.95Be; Guides Q3 Rev $2.35B v $2.13Be; -4.5% afterhours
- SNAP Reports Q2 -$0.16 v -$0.14e, Rev $181.7M v $187Me; Daily active users (DAUs) 173M, +4% q/q, +21% y/y; -12.7% afterhours
All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.
Recommended Content
Editors’ Picks
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold price sits at all-time highs above $2,230, US PCE eyed
Gold price hit all-time highs at $2,236 on Thursday to finish Q1 2024 with a bang. Most major world markets, including the US are closed due to Holy Friday, leaving volatility around Gold price highly subdued. US PCE inflation and Powell are awaited.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.