Global Markets:
- Asian stock markets: Nikkei down 2.27%, Shanghai Composite down 4.27%, Hang Seng down 3.29%, ASX down 0.89%
- Commodities: Gold at $1321.90 (+0.24%), Silver at $16.365 (+0.15%), WTI Oil at $60.52 (-1.03%), Brent Oil at $64.38 (-0.66%)
- Rates: US 10-year yield at 2.829, UK 10-year yield at 1.624, German 10-year yield at 0.759
News & Data:
- (USD) Mortgage Delinquencies 5.17% vs 4.88% previous
- (USD) Unemployment Claims 221K vs 232K expected
- (CAD) NHPI m/m 0.00% vs 0.10% expected
- (GBP) MPC Asset Purchase Facility Votes 0-0-9 vs 0-0-9 expected
- (GBP) Official Bank Rate 0.50% vs 0.50% expected
- (GBP) MPC Official Bank Rate Votes 0-0-9 vs 0-0-9 expected
- (CNY) Trade Balance 136B vs 328B expected
- (AUD) NAB Quarterly Business Confidence 6 vs 8 previous
- Senate Passes Budget Bill to Raise Spending and Reopen Government
Markets Update:
Asian markets declined significantly, echoing the sentiment in Wall Street. Equity sell off has been rampant, with volatility continuing to play the villain. The S&P is now officially in correction territory. Chinese equities have been under heavy pressure, with the sell-off most evident in large-cap stocks which have outperformed over the past year. PBoC continues to skip OMOs, thereby draining liquidity. Nikkei has been rangebound, after declining at the open.
On the brighter side, ASX has relatively outperformed with financials and iron producers declining mildly. The RBA Statement of Monetary Policy, which kept inflation and GDP forecasts unchanged, does not seem to have affected the markets.
Thursday was a volatile day for US Treasuries as well – however regional yields do not reflect the same; JGB steady, Aussie bonds have strengthened. The US Dollar has been mixed against the majors; the yen is off record highs against the dollar. Crude has declined, while precious metals have been largely flat
Rate hike prospects continue to play spoilsport to equity markets. Central Bank policy shifts, and clarity on the same will dictate markets in the coming sessions
Upcoming Events:
- 12:30 AM GMT – (AUD) RBA Monetary Policy Statement
- 01:30 AM GMT – (CNY) CPI y/y
- 01:30 AM GMT – (CNY) PPI y/y
- 09:30 AM GMT – (GBP) Manufacturing Production m/m
- 09:30 AM GMT – (GBP) Goods Trade Balance
- 01:30 PM GMT – (CAD) Employment Change
- 01:30 PM GMT – (CAD) Unemployment Rate
- 04:45 PM GMT – (GBP) MPC Member Cunliffe Speaks
