- China’s exports fell by -1% YoY and missed its forecasts of +2%, further solidifying the case for more stimulus from Beijing. Imports also decline by -5.6% YoY, it’s fourth consecutive negative print. Exports to the US fell by -4% in August, or 22.4% YoY with further declines expected as the trade war continue to bite.
Australia’s housing finance expanded by +5% in July, with demand rising after 2x 25 bps cuts from RBA and APRA relaxing lending standards.
- Japan’s GDP was revised lower to 1.3% YoY from 1.8%, which is just 0.3% QoQ. Some analysts are now expecting Q3 GDP to contract.
- BOE’s Brazier said in an interview with the Times that the financial system won’t collapse after Britain leaves the EU.
- Minor ranges across FX markets with all majors and crosses remaining well within their typical daily ranges. AUD and NZD are the strongest majors, CHF and GBP are the weakest.
- Asian stock markets have started the week on a firm footing on the backdrop of more stimulus hopes from developed nations central banks.
- Revised Q2 Japan GDP data has indicated a less rosy growth outlook for Capex spending where it has been revised down to 0.2% q/q from a preliminary estimate of 1.5% q/q. The Capex downgrade may “force” Japan central bank, BOJ to implement more easing policies in the upcoming monetary policy meeting next week on 19 Sep.
- The best performer as at today’s Asian mid-session is the Korea’s Kospi 200 where it has rallied by 0.58% supported by major semiconductor stocks on the optimistic hope of a U.S.-China trade deal; Samsung Electronics and SK Hynix has risen by 1.3% and 3.2% respectively.
- Hong Kong’s Hang Seng Index has slipped slightly to -0.12% due to violent protests seen over the weekend despite the withdrawal of the controversial China extradition bill as announced by Hong Kong’s Chief Executive on last Wed. Protesters have deemed the withdrawal of the bill as “too little too late”.
- The S&P 500 E-min futures has continued to build on last week’s gains as it inched higher by 0.20% to print a current intraday high of 2989 in today’s Asian session.
- The UK parliamentary vote on Brexit will be the highlight of the session and likely the bigger market driver, over economic data. The government are to once again ask MPs to agree to a snap election, although expectations are they’ll be defeated. Boris Johnson is also set to meet Irish PM Leo Varadkar.Germany’s trade data for Jul where exports are expected to decline by -0.5% m/m from -0.1%m/m seen in Jun. The trade balance surplus is also expected to shrink to EUR17.5 billion from EUR18.1 billion.
- UK data makes up for the baulk of economic data today, with expectations mostly pointing towards the soft side. Manufacturing has contracted for 3-month and down -1.4% YoY, although this has been weighed down by the -4.4% print in April.
- Monthly GDP failed to grow in July at 0%, although this is expected to lift to a mere 0.1% in August. Although, with economic data continuing to fall short of expectations, this leaves potential for a negative print today.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.