Global Markets:
- Asian Stock Markets : Nikkei down 0.42%, Shanghai Composite down 0.83%, Hang Seng down 0.52%, ASX down 0.82%
- Commodities : Gold at $1276.50 (-0.35%), Silver at $14.35 (-0.41%), Brent Oil at $68.16 (+0.43%), WTI Oil at $59.23 (+0.71%)
- Rates : US 10-year yield at 2.268, UK 10-year yield at 0.900, Germany 10-year yield at -0.172
News & Data:
- (AUD) Private Capital Expenditure q/q -1.70% vs 0.50% expected
- (AUD) Building Approvals m/m -4.70% vs 0.10% expected
- (CAD) Overnight Rate 1.75% vs 1.75% expected
- PBOC Adviser Shijin: No problem for China to keep 2019 growth above 6.2%
Markets Update:
Asian stock markets are mostly lower on Thursday, extending losses from the previous session on increased risk aversion, amid concerns about a prolonged U.S.-China trade war and its impact on global economic growth. Speculation that China may weaponize its dominance in rare earth minerals has added to investor worries.
The Nikkei 225 in Japan slipped 0.4% in afternoon trade, as shares of index heavyweights Fast Retailing and Softbank Group declined more than 1% each. The Topix index also fell nearly 0.5%. In Australia, the ASX 200 shed 0.8% as almost all the sectors traded lower. Mainland Chinese shares declined by the afternoon, with the Shanghai composite slipping 0.8% and the Shenzhen component shedding 1.2%.
As investors switched out of equities safe-haven assets such as government bonds found favour, with yields on German benchmark debt approaching record lows. Amid the flight-to-safety Germany’s 10-year bond yield fell to a three-year trough of minus 0.179% overnight. A drop below minus 0.200% set in 2016 would take the yield to a record low.
Lower bond yields not withstanding, the dollar index against a basket of six major currencies was steady at 98.085 and in reach of a two-year peak of 98.371 set last week, with the greenback serving as a safe haven.
Oil prices rose modestly after an industry report showed a decline in U.S. crude inventories that exceeded analyst expectations. The rise followed volatile trading on Wednesday, when oil prices fell to near three-month lows at one point as trade war fears also gripped the commodity markets.
Upcoming Events:
- 01:30 PM GMT – (CAD) Current Account
- 01:30 PM GMT – (USD) Prelim GDP q/q
- 05:00 PM GMT – (USD) FOMC Member Clarida Speaks
- 07:15 PM GMT – (CAD) Gov Council Member Wilkins Speaks
- Tentative – (USD) Treasury Currency Report
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