Asian Stock Market: Mixed trading ahead of the key US PCE data

Asian stock markets trade mixed on Thursday ahead of the US inflation data.
Chinese Manufacturing and Service PMI deteriorated further in August.
Bank of Japan (BoJ) policymaker said that they need more time to transition to monetary tightening.
Investors will focus on the US inflation and labor data later in the day.

Lallalit Srijandorn FXStreet

Asian stock markets trade mixed on Thursday as investors await the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred gauge of inflation ahead of the highly anticipated Nonfarm Payrolls for August. At press time, China’s Shanghai is down 0.60% to 3,117, the Shenzhen Component Index falls 0.44% to 10,416, Hong Kong’s Hang Sang declines 2.02% to 18,401, South Korea’s Kospi is down 0.43% and Japan’s Nikkei is up 0.77%.

In China, manufacturing activity and the services sector deteriorated further this month, which is likely to put more pressure on authorities to move forward with stimulus measures to revive the economy. The National Bureau of Statistics (NBS) showed on Thursday that the Chinese Manufacturing Purchasing Managers' Index (PMI) improved to 49.7 in August from 49.3 in July, but below the market consensus of 49.4. This is the fifth consecutive month that the figure came in below the 50 threshold, which indicates the contraction zone. Meanwhile, the NBS Services PMI decreased to 51.0 51.5 prior and the expectation was at 51.1.

Earlier on Thursday, the People’s Bank of China (PBOC) announced that they will continue to increase loans to private enterprises as part of their efforts to stimulate the private sector economy.

In Japan, Bank of Japan (BoJ) Board member Toyoaki Nakamura stated on Thursday that policymakers need more time to transition to monetary tightening. The data from the Japanese docket showed that Retail Sales rose by 6.8% YoY in July versus 5.6% prior, better than the expectation of 5.4%. While, Industrial Production dropped by 2.0% MoM in July from a rise of 2.4% in the previous month, compared to market consensus of a 1.4% drop.

On the Indian front, India’s annual Gross Domestic Product (GDP) for the first quarter will be released later on Thursday. The growth number is expected to grow by 7.7% compared to the previous reading of 6.1%.

Looking ahead, the US Core Personal Consumption Expenditure Price Index (PCE), the weekly Jobless Claims, and the Chicago PMI will be released later in the day. On Friday, market participants will closely watch the release of Chinese Caixin Manufacturing PMI for August and the US Nonfarm Payrolls data.

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

AUD/USD flirts with 0.7000, lowest since early August amid bullish USD

AUD/USD hits a fresh low since early August during the Asian session on Friday and looks vulnerable near 0.7000 after breaking below the 200-day SMA overnight. Against the backdrop of the hawkish Fed, a two-day rally in oil prices revives inflation fears and continues to push US bond yields to multi-year highs. Adding to this, geopolitical risks lift the US Dollar to a two-month high, overshadowing RBA rate hike bets and weighing on the pair.

USD/JPY pulls back from three-week high after failing near 159.00

USD/JPY edges lower during the Asian session on Friday, stalling its recent strong move to a three-week high of 159.00 as Japanese Yen bears turn cautious amid intervention fears. Meanwhile, the US Dollar retains a strong bullish undertone as the Fed's hawkish outlook and oil-driven inflation fears continue to push US bond yields to multi-year peaks. Furthermore, the BoJ's dovish rate hike last week might cap JPY and support spot prices.

Gold treads water below $4,300

Gold grabs some buying attention and advances marginally at the end of the week, partially retracing the weekly decline, although it is still navigating below the key $4,300 mark per troy ounce. The fresh selling bias on the Greenback and the modest decline in US Treasury yields appear to support the humble advance in the precious metal.

Crypto Today: Bitcoin and Ethereum edge lower, XRP extends recovery as macro headwinds weigh

The broader cryptocurrency market is consolidating on Friday, with Bitcoin paring losses slightly above $84,000. Ethereum declines in tandem with BTC. Ripple (XRP), meanwhile, paints a different picture.

Fed vs BoJ: Both hiked. The market only believes one of them – and the chart shows which

The Federal Reserve (Fed) and the Bank of Japan (BoJ) have just done something remarkably similar. Both central banks raised interest rates by 25 basis points (bps) last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.

Fed vs BoJ: Both hiked. The market only believes one of them – and the chart shows which

The Fed and the BoJ have just done something remarkably similar. Both central banks raised interest rates by 25 bps last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.