Wednesday 31st July: Asian markets fall on diminishing trade deal hopes

Global Markets:

• Asian Stock Markets : Nikkei down 0.81%, Shanghai Composite down 0.45%, Hang Seng down 1.18%, ASX down 0.39%
• Commodities: Gold at $1431.50 (+0.13%), Silver at $16.53 (-0.16%), Brent Oil at $65.22 (+0.91%), WTI Oil at $58.48 (+0.74%)
• Rates : US 10-year yield at 2.054, UK 10-year yield at 0.636, Germany 10-year yield at -0.399

News & Data:

• (AUD) Building Approvals m/m -1.20% vs 0.20% expected
• (JPY) BOJ Policy Rate -0.10% vs -0.10% expected
• (EUR) French Flash GDP q/q 0.20% vs 0.30% expected
• (EUR) German GfK Consumer Climate 9.7 vs 9.7 expected
• (EUR) French Consumer Spending m/m -0.10% vs 0.20% expected
• (EUR) French Gov Budget Balance -77.3B vs -83.9B previous
• (CHF) KOF Economic Barometer 97.1 vs 93.5 expected
• (EUR) German Prelim CPI m/m 0.50% vs 0.30% expected
• (EUR) Italian 10-y Bond Auction 1.56|1.3 vs 2.09|1.3 previous
• (USD) Core PCE Price Index m/m 0.20% vs 0.20% expected
• (USD) Personal Spending m/m 0.30% vs 0.30% expected
• (USD) Personal Income m/m 0.40% vs 0.40% expected
• (USD) S&P/CS Composite-20 HPI y/y 2.40% vs 2.40% expected
• (USD) CB Consumer Confidence 135.7 vs 125.1 expected
• (USD) Pending Home Sales m/m 2.80% vs 0.50% expected
• (GBP) BRC Shop Price Index y/y -0.10% vs -0.10% previous
• (GBP) GfK Consumer Confidence -11 vs -13 expected
• (CNY) Manufacturing PMI 49.7 vs 49.6 expected
• (CNY) Non-Manufacturing PMI 53.7 vs 54 expected
• (NZD) ANZ Business Confidence -44.3 vs -38.1 previous
• (AUD) CPI q/q 0.60% vs 0.50% expected
• (AUD) Trimmed Mean CPI q/q 0.40% vs 0.40% expected
• (AUD) Private Sector Credit m/m 0.10% vs 0.30% expected
• (JPY) Consumer Confidence 37.8 vs 38.5 expected
• (JPY) Housing Starts y/y 0.30% vs -2.20% expected
• US-China trade talks restarted; atmosphere is good
• Fed to cut rates for first time since 2008 to save the long-running economic expansion

Markets Update:

Asian markets fell in early trading Wednesday, after President Donald Trump poured cold water over optimism for a trade deal as negotiations between the U.S. and China resumed. In a series of tweets Tuesday morning, Trump criticized China for not buying more American agricultural products, and took credit for its slowing economy. On Wall Street, a mixed batch of corporate earnings helped drag indexes slightly lower Tuesday, pulling the market farther from its recent record highs for the second straight day.

The Nikkei slid 0.8% while Hang Seng slumps over 1.18% as investors await possible Fed rate cut. Also, Hong Kong is set to announce its second-quarter GDP figures later on Wednesday. Analysts expect the local economy to be hurt by the city’s massive protests. The Shanghai Composite retreated 0.45% while Australian shares are down 0.39%.

Treasury yields inch higher on consumer confidence ahead of Fed decision. The dollar held steady on Wednesday, largely in a wait-and-see mode as traders looked ahead to the outcome of the Federal Reserve’s meeting later in the day when policymakers are expected to cut interest rates for the first time since 2008.

Oil prices gained on Wednesday in Asia after the release of weekly data that showed a decline in U.S. crude stockpile. The gains also came as traders await the expected first rate cuts by the U.S. Federal Reserve in a decade. Gold has now recouped almost all the losses suffered after last week’s European Central Bank meeting and is trading at $1430 an ounce.

Upcoming Events:

• 10:00 AM GMT – (EUR) CPI Flash Estimate y/y
• 10:00 AM GMT – (EUR) Core CPI Flash Estimate y/y
• 01:15 PM GMT – (USD) ADP Non-Farm Employment Change
• 01:30 PM GMT – (CAD) GDP m/m
• 01:30 PM GMT – (CAD) RMPI m/m
• 01:30 PM GMT – (USD) Employment Cost Index q/q
• 02:45 PM GMT – (USD) Chicago PMI
• 07:00 PM GMT – (USD) FOMC Statement
• 07:00 PM GMT – (USD) Federal Funds Rate
• 07:30 PM GMT – (USD) FOMC Press Conference
• &more…