AsiaAsian equities are closing in the red again this morning, save the Nikkei 225, which closed fractionally positive (up 0.09%), as little sign of progress is seen from US-China talks, which recommenced in Shanghai this week. China’s Caixin Manufacturing index this morning indicates a half-point improvement to 49.9 – just touching expansionary territory. Japan’s Nikkei Manufacturing PMI overnight contracted again with another 2 tenths drop to 49.4. Australia’s Commonwealth Bank Manufacturing Index last night shows a 2/10-point increase to 51.6 in July, while export prices in Q2 fell to 3.8% QoQ. Import prices rose from June’s 0.2% contraction to 0.9% – also quarter-on-quarter.
EuropeWith the Bank of England expected to maintain interest rates despite Brexit headwinds, Boris Johnson in Ireland yesterday said he favoured a return to the power-sharing government for the North of the island. Reuters reports that a limited backstop was discussed between the parties. GDP in Europe came in above expectations for Q2 but, at 1.1%, below last year’s 1.2%. Consumer inflation withered another fifth and read at 1.1% in July. And manufacturing PMIs this morning show a slight improvement – 3 ticks up to 48.2 in Spain, 1 to 48.5 in Italy, to 46.5 for the Zone, and – disappointingly – to 43.2 in Germany. France’s data slipped below the contraction threshold to 49.7.
USUS indexes ended in the red last night and the dollar jumped higher after the FOMC yesterday cut interest rates by a quarter percent for the first time in over a decade. The counter-intuitive rise in the USD is being attributed to Fed Head Powell, who excused the deed with growing global tensions and trade war costs, stressing that this was not the beginning of a trend. Yesterday saw a much better than expected 156K increase in ADP’s employment change index, while the MBA’s mortgage applications number in July contracted by 1.4% – an improvement on 1.9% the month before. In Canada, too, pundits cheered at a mere 1-tick drop in May’s GDP reading to 0.2% but less thrilled with a 1.4% contraction in industrial product prices.
CommoditiesOil yesterday received a dollar-fifty boost after the EIA reported a much-better-than-expected 8½ mB drawdown. It has since lost about half of those gains, as Reuters reports OPEC output at an 8-year low and a 26KB/D decline in US output. Bitcoin re-entered the 10K zone overnight as 3 MIT researchers claim Facebook’s Libra white paper was “lifted” from a paper they published last year at the Royal Society.
CorporateBarclays this morning reported an 82% increase in H1 profits as shares rose 0.5%. It expects to pay a 3-pence dividend to investors. News from BMW was not as good, earnings falling by 20%, as investments rose 39% on emissions requirements. Shares are up 0.72%. Still waiting to report today – GM before the New York open, and Exxon and Chevron tomorrow.
|08:00 AM GMT – EU||Markit Manufacturing PMI (Jul)|
|08:30 AM GMT – UK||Markit Manufacturing PMI (Jul). BoE Interest Rate Decision & Quarterly Inflation Report at 11:00. Governor Carney speech at 11:30|
|12:30 PM GMT – US||Challenger Job Cuts (Jul), Initial & Continuing Jobless Claims (Jul 26). Markit Manufacturing PMI (Jul) at 13:45, ISM Manufacturing PMI and Construction Spending (Jun) at 14:00. And Total Vehicle Sales at 19:30.|
|13:30 PM GMT – Canada||Markit Manufacturing PMI (Jul)|
|23:50 PM GMT – Japan||Foreign Reserves, Monetary Base and BoJ Monetary Policy Meeting Minutes.|
|1:30 AM GMT (+1) – Australia||New Home Sales, Retail Sales (Jun) and Producer Price Index (Q2)|
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