Global Markets:
- Asian Stock Markets : Nikkei up 2.27%, Shanghai Composite up 1.71%, Hang Seng up 0.40%, ASX up 0.99%
- Commodities: Gold at $1553.65 (-0.43%), Silver at $19.49 (-0.28%), Brent Oil at $60.78 (+0.13%), WTI Oil at $56.27 (+0.02%)
- Rates : US 10-year yield at 1.516, UK 10-year yield at 0.484, Germany 10-year yield at -0.680
News & Data:
- (USD) Trade Balance -54.0B vs -54.2B expected
- (CAD) Labor Productivity q/q 0.20% vs 0.10% expected
- (CAD) Trade Balance -1.1B vs 0.2B expected
- (EUR) Retail Sales m/m -0.60% vs -0.60% expected
- (GBP) Services PMI 50.6 vs 51 expected
- (EUR) Final Services PMI 53.5 vs 53.4 expected
- (EUR) German Final Services PMI 54.8 vs 54.4 expected
- (EUR) French Final Services PMI 53.4 vs 53.3 expected
- (EUR) Italian Services PMI 50.6 vs 51.5 expected
- (EUR) Spanish Services PMI 54.3 vs 53 expected
- (CNY) Caixin Services PMI 52.1 vs 51.7 expected
- (AUD) GDP q/q 0.50% vs 0.50% expected
- (NZD) ANZ Commodity Prices m/m 0.30% vs -1.40% previous
- (USD) IBD/TIPP Economic Optimism 50.8 vs 55.4 expected
- (CAD) Overnight Rate 1.75% vs 1.75% expected
- (USD) Wards Total Vehicle Sales 17.0M vs 16.8M expected
- (AUD) Trade Balance 7.27B vs 7.20B expected
- (JPY) 30-y Bond Auction 0.14|3.5 vs 0.29|3.5 previous
Markets Update:
Asian markets gained in early trading Thursday after an announcement that the U.S. and China will resume trade negotiations early next month. Investors also were cheered by encouraging global developments, including British lawmakers seeking a less chaotic exit from the European Union and easing political tensions in Hong Kong.
Investors have been worried that the trade war and a slowing global economy could tip the U.S. into a recession. But traders set aside those concerns Wednesday, focusing instead on geopolitical developments. The Chinese yuan jumped versus the dollar in offshore trade, while safe-have assets such as gold and the yen fell.
Stocks jump in Japan, mainland China, while Hong Kong investors wait to see if political tensions ease. Japan’s Nikkei surged 2.3%, while Hong Kong’s Hang Seng Index rose 0.4%, as investors there wondered if new government concessions would put an end to months of protests. Hong Kong shares erased early losses to rise 0.5%. They had jumped in afternoon trade on Wednesday after leader Carrie Lam said she was withdrawing an extradition bill that had triggered months of often violent protests in the Asian financial hub. The Shanghai Composite gained 1.7% while Australia’s ASX 200 gained about 1%.
U.S. Treasury yields extended gains in Asia and the yield curve steepened, both signs that investors were willing to take on riskier assets. The 10-year yield rose to 1.516%, while two-year yields rose to 1.4519%.
The spread between two- and 10-year Treasury yields, the most commonly used measure of the yield curve, rose to its highest since Aug. 21 on Wednesday but narrowed slightly in Asian trade. The curve inverted on Aug. 14 for the first time since 2007 when long-term yields traded below short-term yields, which is a widely accepted indicator of coming recession.
The dollar rose to 106.63 Japanese yen from 106.21 yen on Wednesday. Oil prices fell on Thursday in Asia as rising U.S. crude inventories outweighed positive Sino-U.S. trade development. U.S. West Texas Intermediate crude fell 0.02% to $56.27 while International Brent Oil Futures were down 0.13% to $60.78. Gold prices fell to $1553.65 on Thursday in Asia as global stocks recovered on positive Hong Kong’s political development and reports that the U.S. and China would resume trade talks in October.
Upcoming Events:
- Tentative – (EUR) Spanish 10-y Bond Auction
- Tentative – (EUR) French 10-y Bond Auction
- 11:30 am GMT – (USD) Challenger Job Cuts y/y
- 12:15 pm GMT – (USD) ADP Non-Farm Employment Change
- 12:30 pm GMT – (USD) Revised Nonfarm Productivity q/q
- 12:30 pm GMT – (USD) Revised Unit Labor Costs q/q
- 12:30 pm GMT – (USD) Unemployment Claims
- 1:45 pm GMT – (USD) Final Services PMI
- 2:00 pm GMT – (USD) ISM Non-Manufacturing PMI
- 2:00 pm GMT – (USD) Factory Orders m/m
- 2:30 pm GMT – (GBP) MPC Member Tenreyro Speaks
- 2:30 pm GMT – (USD) Natural Gas Storage
- 3:00 pm GMT – (USD) Crude Oil Inventories
- 3:45 pm GMT – (CAD) Gov Council Member Schembri Speaks
- 4:00 pm GMT – (CHF) SNB Chairman Jordan Speaks
- 10:30 pm GMT – (AUD) AIG Construction Index
- 11:30 pm GMT – (JPY) Average Cash Earnings y/y
- 11:30 pm GMT – (JPY) Household Spending y/y
- &more…
