Asia-Pacific Shares Mixed Ahead of US Inflation Data; Cyclicals Drive Japan’s Nikkei to More Than 31-Year High

The major Asia-Pacific stock indexes traded mixed on Tuesday, with investors eyeing U.S. inflation data for more clues on when the Federal Reserve will begin reducing its massive stimulus.

Locally, investors remained on edge over China’s tightening grip on its technology companies and a widening liquidity crunch for the country’s most indebted developer.

Cash Market Recap

In Japan, the Nikkei 225 Index settled at 30670.01, up 222.73 or +0.73%. Hong Kong’s Hang Seng Index is trading 25501.32, down 312.49 or -1.21% and South Korea’s KOSPI Index finished at 3148.83, up 20.97 or +0.67%.

In China, the benchmark Shanghai Index settled at 3662.60, down 52.77 or -1.42% and in Australia, the benchmark S&P/ASX 200 closed at 7437.30, up 12.10 or +0.16%.

US Consumer Inflation Data on Tap

The U.S. is scheduled to release its August report on consumer inflation at 12:30 GMT. The Consumer Price Index (CPI) is expected to show core consumer prices rose 0.3% in August. Prices were up 0.3% the previous month and 0.9% in June. Economists expect annual inflation to ease slightly to 4.2% from 4.3% in July.

China Shares Fall as Evergrande Woes Weigh on Property, Financials

Chinese shares closed lower on Monday, dragged by real estate and financials after the country’s most-indebted developer warned of a risk of a cross-default.

Property developers tumbled 3.8%, while the financials sub-index shed 2.9% after cash-strapped China Evergrande Group warned of a risk of cross-default as real estate sales continued to plunge.

The developer’s struggles to quickly sell off assets and avert defaults on its massive liabilities are raising the risk of contagion for other privately-owned developers, fund managers and analysts say.

Japan’s Nikkei Ends at Over 31-year High as Cyclicals Shine

Japan’s Nikkei closed at a more than 31-year high on Tuesday, led by cyclical stocks tracking overnight Wall Street gains, while progress in domestic vaccine rollouts raised hopes for an economic reopening.

Sentiment was also boosted by hopes for an economic reopening as Japan is on track to reach the vaccination levels of the United States and Europe. The government said on Tuesday more than 50% of Japan’s population have been fully vaccinated.

South Korean Stocks End Higher Ahead of US inflation Data

South Korean shares ended higher on Tuesday, buoyed by foreign buying after overnight gains on Wall Street, while investors awaited U.S. August inflation data due at 12:30 GMT.

Among the heavyweights, chip giants Samsung Electronics and SK Hynix rose 0.39% and 0.94%, respectively, while platform companies Naver and Kakao fell 1.35% and 0.40%, respectively.

Foreigners were net buyers of 294.0 billion won ($251.14 million) worth of shares on the main board.

For a look at all of today’s economic events, check out our economic calendar.

Global Stock Markets Slip on Inflation, Tax, Regulation Worries

Leading U.S. House of Representatives Democrats said they are seeking to raise the tax rate on corporations to 26.5%, up from the current 21%.

The U.S. consumer price data due out on Tuesday will give a broad picture of the economy’s progress ahead of the Federal Reserve’s meeting next week.

The MSCI world equity index, which tracks shares in 45 nations, shed 0.22%, while U.S. stocks were mixed.

The Dow Jones Industrial Average rose 0.4% and the S&P 500 fell 0.17%. The Nasdaq Composite dropped 0.4%, as investors pivoted away from major technology stocks to sectors more likely to benefit from an economic bounce later this year.

The dollar climbed to a two-week peak against a basket of major currencies as investors priced in the possibility that the Federal would reduce its asset purchases.

“Investors are grappling with an unusually wide range of potential economic outcomes beyond the post-pandemic restart, reflected in frequent shifts in equity market leadership and volatile bond yields,” said Vivek Paul, senior portfolio strategist at BlackRock Investment Institute.

The yield on 10-year Treasury notes was down 2 basis points to 1.321%.

European stocks ended higher for the first time in five days on hopes that a strong euro zone economic recovery can outweigh risks of a global slowdown. The pan-European STOXX 600 index was up 0.3% after hitting a three-week low last week.

Asian stocks fell earlier in the day following news of a fresh regulatory crackdown on Chinese firms.

China fired a fresh regulatory shot at its tech giants, telling them to end a long-standing practice of blocking each other’s links on their websites. The Financial Times also reported that China is aiming to break up the payments app Alipay.

The Chinese blue-chip index fell 0.5% and MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.78% lower. Japan’s Nikkei rose 0.22%.

The core reading of the U.S. consumer price index is expected to show a rise of 0.3% in August, down from 0.5% the previous month and 0.9% in June.

The U.S. Federal Reserve is paying close attention to price pressures as it mulls when to begin to reduce its massive bond holdings and how soon to begin lifting rates from near zero. It also remains on the lookout for any signs that price pressures may broaden.

The general air of risk aversion helped lift the dollar index to 92.69, up 0.12%.

Oil prices rose to six-week highs as U.S. output remains slow to return two weeks after Hurricane Ida slammed into the Gulf Coast and worries another storm could affect output in Texas this week.

Brent crude settled up $0.59, or up 0.81%, at $73.51 a barrel. U.S. crude settled up $0.73, or up 1.05%, at $70.45 per barrel.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sujata Rao in London and Elizabeth Dilts Marshall in New York; additional reporting by Wayne Cole in Sydney and Dhara Ranasinghe in London; editing by Emelia Sithole-Matarise, Will Dunham, Chizu Nomiyama and Dan Grebler)

Asia-Pacific Stock Indexes Finish Mostly Higher; Hang Seng Tumbles 1.5% as China Tech Crackdown Continues

The major Asia-Pacific stock indexes finished mixed on Monday with shares in Hong Kong taking a more than 1.5% hit following a Financial Times Report that Beijing wants to break up Ant Group’s Alipay and force the creation of separate loans app.

Shares in China manage to eke out a small gain despite a sharp drop in Chinese electric vehicles stocks, which fell after the country’s industry minister said consolidation in the sector is needed as there are “too many” EV makers in China. BYD dropped 2.14% while Xpeng slipped 2.35%, CNBC reported.

Cash Market Recap

Gains in China were also capped by a 34.57% plunge in shares of Chinese property developer Soho China after a takeover deal by Blackstone Group fell through. Soho China said in a filing on Friday that Blackstone has decided not to go through with its $3 billion bid to buy the developer.

In the cash market on Monday, Japan’s Nikkei 225 Index settled at 30447.37, up 65.53 or +0.22%. Hong Kong’s Hang Seng Index finished at 25813.81, down 392.10 or -1.5% and South Korea’s KOSPI Index closed at 3127.86, up 2.10 or -0.07%.

In China, the benchmark Shanghai Index settled at 3715.37, up 12.26 or +0.33% and in Australia, the benchmark S&P/ASX 200 Index finished at 7425.20, up 18.60 or +0.25%.

Hong Kong Shares Drop, Dragged Lower by Tech on Latest Crackdown

Hong Kong shares finished down on Monday, dragged lower by internet giants following a slew of moves by Beijing to crack down on the country’s technology sector, Reuters reported. Shares of tech giants Meituan, Alibaba Group and Tencent Holdings dropped 4.5%, 4.2% and 2.5%, respectively.

The latest moves in Beijing’s crackdown include telling delivery and ride-hailing firms to better protect workers, breaking up Ant’s Alipay and forcing creation of separate loans app, and telling internet giants to stop blocking each other’s website links from their platforms.

China’s Blue-Chips End Lower as Lending Data Disappoints

Chinese blue-chips ended lower on Monday, dragged down by semiconductors and tourism stocks, after official data showed new bank lending in Beijing rose less than expected last month, while Shanghai shares closed higher. Chinese banks extended 1.22 trillion yuan in new yuan loans in August, up from July but falling short of analysts’ expectations.

Aussie Shares Gain on Boost from Sydney Airport, Energy and Materials Stocks

Australian shares rose on Monday, boosted by airport operator Sydney Airport Holdings surging on an improved takeover bid and solid gains in the energy and material stocks.

Sydney Airport Holdings advanced as much as 5.1% to its highest in over a year after bidder Sydney Aviation Alliance increased its offer price to A$8.75 from prior proposals at A$8.45 and A$8.25, to acquire all shares in the airport operator.

Energy stocks rose 1.25% after oil prices hit a one-week high on concerns over U.S. supplies, along with higher demand hopes.

Major miners rose 1.06% led by lithium-boron supplier Ioneer Ltd, up 7.58%, followed by lithium miner Pilbara Minerals Ltd, gaining 7.32%.

For a look at all of today’s economic events, check out our economic calendar.

Marketmind: Hitting the Buffers

A look at the day ahead from Sujata Rao.

Yet there is no dismissing the brewing concerns — we seem to be past peak liquidity and peak growth, yet inflationary pressures show no sign of abating. Chinese factory gate prices have hit 13-year highs, the ECB just upped inflation projections and later on Friday, we will see what U.S. producer prices looked like in August. Remember last month brought the biggest annual increase in over a decade.

Warnings about input costs are coming through from companies too, with Nestle warning of even higher factory prices in 2022. The question is when these costs trickle down to consumers and their earnings; wage inflation, as we know, tends to be less easily tamed.

It comes as the post-pandemic growth rebound fizzles. Data shows Britain’s economy barely grew in July (versus expectations for a 0.6% expansion), even as tax hikes loom.

What of stimulus? The Bank of England appears well on the road to a 2022 interest rate rise while the Bank of Canada on Thursday flagged plans to stop adding new stimulus and to raise interest rates.

Policy has long been tightening across emerging markets and later on Friday, Russia will likely raise interest rate for the fifth time this year.

Finally, there is no getting away from the fact that the ECB — among the more dovish central banks — has hit peak QE, even though it was at pains on Thursday to describe its stimulus slowdown as recalibration rather than tapering.

So while equity futures signal a more cheerful session in Europe and Wall Street, stocks may face a rocky ride from here.

Key developments that should provide more direction to markets on Friday:

-U.S. President Joe Biden and Chinese leader Xi Jinping spoke for 90 minutes

-China Evergrande bonds rebound as loan payment extensions ease default worries

-Willis Towers Watson has $5 bln of capital, possibly for M&A

-Euro zone finance ministers meet

-Fed speakers: Cleveland President Loretta Mester 1300 GMT

Russia central bank meeting

Ratings: S&P: Ukraine, Ghana, Jordan, Malta; Moody’s: Montenegro

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sujata Rao; Editing by Dhara Ranasinghe)

U.S. Shares Retreat, European Shares end Little-Changed

Major U.S. indexes were lower, pulling back from earlier gains but still close to all-time highs.

The Dow Jones Industrial Average fell 133.74 points, or 0.38%, to 34,897.33, the S&P 500 lost 14.45 points, or 0.32%, to 4,499.62 and the Nasdaq Composite dropped 4.28 points, or 0.03%, to 15,282.36 by mid afternoon.

Federal Reserve Bank Governor Michelle Bowman added her voice Wednesday to the growing number of policymakers who say the weak August jobs report likely won’t throw off the central bank’s plan to trim its $120 billion in monthly bond purchases later this year.

Earlier in the day, U.S. data showed the number of Americans filing new claims for jobless benefits fell to the lowest level in nearly 18 months last week, offering more evidence that job growth was being hindered by labor shortages rather than cooling demand for workers.

After falling as much as 0.9% in morning trade, the pan-European STOXX 600 index ended largely unchanged around 467.57 points. The index had shed 1.5% over the past two days on fears of a more-hawkish-than-expected ECB.

Euro zone bonds yields tumbled as the European Central Bank took its first tentative step in withdrawing COVID-era stimulus. Southern Europe led a fall in euro zone sovereign bond yields.

The euro rose 0.15% against the dollar, climbing for the first time in four sessions, while bond markets cheered by sending French 10-yields negative again.

“We’re seeing some modest weakness mainly because the market is just in flux. There is no real clarity on when we will start to see the Fed and ECB start to pull back stimulus,” said Edward Moya, a senior market analyst with OANDA in New York.

Instead of hinting at any potential end date for its pandemic-era purchase programme, European Central Bank President Christine Lagarde instead channelled the spirit of former British Prime Minister Margaret Thatcher, saying: “The lady isn’t tapering.”

Germany’s 10-year yield, the benchmark for the bloc, fell. [GVD/EUR]

FRAGILE CHINA

MSCI’s benchmark for global equity markets fell 0.33% to 740.33. Emerging markets stocks fell 1.18%.

The UK’s FTSE 100 dropped 1% with low-cost airline easyJet tumbling over 10% as it tapped shareholders for 1.2 billion pounds ($1.7 billion). [.EU]

MSCI’s broadest index of Asia-Pacific shares ended down 1%, which was its worst daily performance since Aug. 19, the last time markets decided they were worried about the U.S. Federal Reserve tapering its massive asset purchase programme.

Chinese tech giants Tencent, NetEase and Alibaba had slumped 8.5%, 11% and 6% respectively after online gaming chiefs were summoned by authorities to check they are sticking to strict new rules for the sector.

“The global story is looking soft and it’s being hit by the Delta variant plus concern about potentially the Fed still moving towards a taper,” said Rob Carnell, Asia head of research at ING. “It’s an unsettling combination of things.”

The China angst had meant Hong Kong, where many heavyweight Chinese firms are also listed, shed 2.3%.

News that Chinese authorities had told gaming firms to resolutely curb incorrect tendencies such as focusing “only on money” and “only on traffic” had hurt companies with large gaming operations. Tencent fell 8.5%, Bilibili lost nearly 9% and NetEase slumped 11%.

There was more turbulence too for the country’s most indebted property giant, Evergrande.

Media reports the company would suspend some interest payments on loans and payments to its wealth management products sent its shares down more than 10% at one point, although they recovered almost half of the drop on news that some creditors had agreed to loan payment extensions.

Korea’s Kospi fell 1.5%, also under pressure from regulatory scrutiny of local tech players. In Korea’s case, fintech names such as Kakao Corp , which sank 7.2%, and Naver Corp, down 6.9%, were in the spotlight.

Australian stocks lost nearly 2% after payrolls data showed a sharp drop in jobs in the first half of August.

Gold steadied in choppy trading, buoyed by a slight retreat in the dollar. Spot bullion prices were up 0.4%.

Oil prices fell on China’s plan to tap state reserves and a smaller-than-expected drawdown in U.S. crude supplies.

Brent crude was last down $1.14, or down 1.57%, at $71.46 a barrel. U.S. crude was last down $1.16, or down 1.66% at %68.15.

($1 = 0.7246 pounds)

(Additional reporting by Alun John in Hong Kong; Editing by Carmel Crimmins and Nick Zieminski)

Stocks Sit Near Record Highs as Jobs Report Looms

U.S. consumer confidence fell to a six-month low in August as soaring COVID-19 infections and rising inflation dampened the economic outlook, a view that data from China, Canada and the EU also implied.

China’s businesses and the broader economy came under increased pressure in August as factory activity expanded at a slower pace and the services sector slumped into contraction. In Canada, the economy unexpectedly shrank 1.1% in the second quarter on an annualized basis.

The Delta variant has cast a shadow on U.S. consumer optimism, which had soared earlier in the year on expectations vaccines would bring a return to normalcy, said Jim Baird, chief investment officer at Plante Moran Financial Advisors.

“Consumers are increasingly aware of the near-term risks to the economic recovery created by rising prices and the COVID-19 resurgence,” Baird said in a note. But confidence is relatively high and consistent with solid consumer spending, he said.

Investors are taking some risk off the table after the U.S. and Chinese economies, the world’s two largest, showed signs of short-term weakness, said Edward Moya, senior market analyst at foreign exchange brokerage OANDA.

“The Delta variant’s impact on the U.S. economy might be greater than initially anticipated and that won’t bode well for third-quarter spending,” he said.

Markets mostly shrugged off a surge in euro zone inflation to a 10-year high in August, with further rises likely, as the European Central Bank’s narrative of temporary inflation and ultra-easy policy for years remained intact.

MSCI’s all-country world index traded up 0.04%, on track for another closing record high and its seventh month of consecutive gains.

In Europe, the broad STOXX Europe 600 index closed down 0.38% but notched its seventh straight month of gains – its best monthly winning streak since 2013. Technology was the best performing European sector in August, up 6% on several strong earnings reports.

On Wall Street, stocks seesawed near breakeven. The Dow Jones Industrial Average fell 0.15% and the S&P 500 slid -0.12%. The Nasdaq Composite rose 0.06%.

Stocks in emerging markets jumped, with MSCI’s EM index rising 1.71%.

Value slightly outpaced growth stocks, a change from Monday when technology shares jumped after Federal Reserve Chair Jerome Powell indicated last week that interest rates would remain low well past the beginning of the Fed’s bond-purchasing program.

The dollar slipped to its lowest level in more than three-weeks against a basket of currencies as investors await U.S. jobs data on Friday that could shape future Fed monetary policy. The greenback later pared losses to trade little changed.

The dollar index fell 0.06% to 92.639, while the euro was up 0.1% at $1.1809. The yen traded up 0.06% at $109.9800.

U.S. Treasury yields rebounded after earlier easing a bit following the U.S. consumer confidence data. The benchmark 10-year yield rose 1.8 basis points to yield 1.302%.

Benchmark German bond yields rose to the highest in more than five weeks after a higher-than-expected inflation reading and an ECB policymaker called on the bank to reduce its emergency bond purchases as soon as the fourth quarter.

Germany’s 10-year bund yield, the benchmark for the euro zone, rose as high as -0.376%.

Oil slipped as the Organization of Petroleum Exporting Countries and its allies geared up for a meeting on Wednesday amid calls from the United States to pump more crude, though Brent still traded well above $70 a barrel.

Brent futures fell 42 cents to settle at $72.99 a barrel. U.S. crude settled down 71 cents at $68.50 a barrel.

U.S. gold futures settled up 0.3% at $1,818.10 an ounce.

Asian shares overnight broadly recovered. MSCI’s gauge of Asia Pacific stocks outside Japan gained 1.6%, while Japan’s Nikkei 225 bounced back to rise 1.1% despite weak July industrial output data.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Herbert Lash; Editing by Alistair Bell and Sonya Hepinstall)

Global Equities Hit Record Highs; Oil Closes Higher

MSCI’s benchmark for global equity markets hit a record. The S&P 500 .SPX and Nasdaq also rose to all-time highs as dovish remarks from the Federal Reserve last week bolstered optimism in an economic rebound and eased fears of a sudden tapering in monetary stimulus.

The Dow Jones Industrial Average rose 5.8 points, or 0.02%, to 35,461.6, the S&P 500 gained 26.47 points, or 0.59%, to 4,535.84 and the Nasdaq Composite added 154.43 points, or 1.02%, at 15,283.93 by 3:06 p.m. ET (19:06 GMT).

The Europe-wide STOXX 600 rose 0.07% and was on course to end August with a rise of more than 2% – its seventh month of gains in what would be its longest such winning run in over eight years.

Asian stocks hit a two-week high and Japan’s blue-chip Nikkei closed up 0.5%.

Positive sentiment in equity markets was underpinned by Friday’s Jackson Hole speech by Fed Chair Jerome Powell in which he said tapering of stimulus measures could begin this year, but added the central bank would remain cautious.

“The questions now should pivot from the timing of the taper to its speed. How fast will the Fed reduce its purchases from the current $120 billion monthly rate?” said Christopher Smart, chief global strategist & head of the Barings Investment Institute.

“That will likely be determined by some of the data coming in this week, including U.S. consumer confidence and jobs, but also European inflation and Chinese PMIs.”

With the market focused on the “medium-term,” traders have seen any weakness as buying opportunities, said Pictet Wealth Management strategist Frederik Ducrozet.

“We are going from great to good – the outlook is not as great as it was earlier this year but it’s still consistent with further equity market gains,” he added.

Chinese shares remained the outlier, with the U.S.-listed shares of gaming firms such as NetEase Inc dropping on signs of further regulation.

Chinese regulators cut the amount of time players under the age of 18 can spend on online games to an hour on Fridays, weekends and holidays, state media reported.

The new rules come amid a broad crackdown by Beijing on China’s tech giants, such as Alibaba Group and Tencent Holdings that has hammered Chinese shares traded at home and abroad.

OIL OFF HIGHS

Oil prices edged higher but were off a four-week high as Hurricane Ida weakened into a Category 1 hurricane within 12 hours of coming ashore.

Nearly all U.S. offshore Gulf oil production, or 1.74 million barrels per day, was suspended in advance of the storm.

Focus turned to a meeting of the Organization of the Petroleum Exporting Countries and its allies on Wednesday, with sources telling Reuters the group is likely to keep its oil output policy unchanged and continue with its planned modest production increase.

Brent crude futures settled up 71 cents at $73.42 a barrel after touching four-week highs. They rose more than 11% last week in anticipation of disruptions to oil production from Hurricane Ida.

U.S. oil rose 47 cents to $69.21 a barrel, having jumped a little more than 10% over the last week.

“Hurricane Ida will dictate oil’s near-term direction,” said Jeffrey Halley, senior market analyst at OANDA. “If Ida weakens and its path of destruction is lower than expected, oil’s rally will temporarily lose momentum here.”

In bond and currency markets, it was the Fed’s dovish tone that held sway, with Friday’s key U.S. jobs report in focus.

U.S. Treasury yields retreated as the market looked ahead to the release this week of the August employment report and the possibility it could factor into the timing of the Fed’s tapering announcement.

The 10-year U.S. Treasury yield was around 1.2852% , while the dollar index – which measures the greenback against a basket of currencies – edged higher after touching a two-week low.

The euro edged up to $1.18, off a three-week peak touched earlier in the session.

“If we get a (U.S. payrolls) number close to a million that would increase the odds of taper being announced in September, but if the number is line with expectations then there’s a 50-50 chance for a September move,” said Vasileios Gkionakis, global head of FX strategy at Lombard Odier Group.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Chris Prentice and Dhara Ranasinghe; additional reporting by Alex Lawler in London; editing by Mark Potter, Bernadette Baum, Pravin Char and Richard Chang)

Asian Stocks Hold Gains as Markets Await Powell Speech

MSCI’s broadest index of Asia-Pacific shares outside Japan spent most of the day near flat, but was last up 0.34%, and about 4% higher so far this week.

Australia’s market rose 0.22% and South Korea gained 0.16%, though Chinese blue chips fell 0.07%, and U.S. stock futures, the S&P 500 e-minis, were down 0.02%.

In early European trades, the pan-region Euro Stoxx 50 futures and FTSE futures were both up 0.04%

Japan’s Nikkei was also flat, but a Reuters poll of analysts and fund managers showed Japanese shares are expected to recover from their eight-month low marked on Friday to near a 30-year high by the end of this year.

“Sentiment (is) positive but vulnerable to shifts ahead of the Jackson Hole conference which features Fed Chair Powell on Friday,” said Rob Carnell, ING head of Asia research in a note.

“Part of the sentiment improvement may lie with recent thoughts that this weekend’s conference will not deliver any further insight into the timing of any Fed taper.”

This marks a change from last week, when MSCI’s Asia ex-Japan index fell to its lowest in 2021, spooked by a combination of fears about slowing growth in Asia amid outbreaks of the Delta variant of the new coronavirus, and worries the Fed might to begin shrinking its monetary stimulus sooner rather than later.

Chinese regulatory crackdowns that have roiled sectors from technology to property, also weighed on shares in Hong Kong and mainland China, dragging on the broader Asian index.

On Wednesday, the Hong Kong benchmark fell 0.16% after posting its best day in a month the day before.

The Hang Seng TECH Index, which reached its all time low last week amid worries about the regulatory crackdowns, gained 0.4%, building cautiously on this week’s strong gains as investors piled into oversold stocks.

“It’s been a fairly obvious trade to go back to neutral particularly on stocks that have been oversold,” said Rob Mumford, a Hong Kong based investment manager at GAM Investments.

“How it progresses from here, I don’t think is as much about China and Asia but what the U.S. does. If it’s a benign scenario out of Jackson Hole I think you’ll definitely see China mean revert,” he said.

On Friday, the Federal Reserve will have its annual economic symposium, traditionally held at Jackson Hole, though this year it will take place virtually due to the spread of COVID-19 in the country.

The focus remains squarely on Chair Jerome Powell’s remarks at the event for any clues regarding the timeline for Fed’s tapering of asset purchases, an issue that has buffeted financial markets in recent months.

The yield on benchmark 10-year Treasury notes was last 1.2919% little changed from their US close of U.S. close of 1.29%, having touched as much as 1.304% earlier in the session.

The dollar gained a little ground in Asian trading on Wednesday but was still not far above a one-week low versus major peers on Wednesday.

“If Powell speaks about the policy outlook and more specifically, hints at the time and/or pace of tapering, the USD could get a boost in our view,” wrote analysts at CBA in a note.

“In the meantime, the USD will remain guided by broader market mood.”

U.S. crude dipped 0.28% to $67.36 a barrel, while Brent crude fell 0.15% to $70.94 per barrel – both are up around 8% on the week, however, after posting their biggest weekly decline in more than nine months last week. [O/R]

Safe haven gold fell in tandem with the broad increase in risk appetite, with the spot price dropping 0.35% to $1,796.03 per ounce.

For a look at all of today’s economic events, check out our economic calendar.

(Editing by Shri Navaratnam and Kim Coghill)

Asia-Pacific Shares Down Across the Board; Hong Kong’s Hang Seng Falls Nearly 2% on Weaker Tech Shares

The major Asia-Pacific stock indexes were down across the board on Friday with some of the selling fueled by the strengthening U.S. Dollar as the markets prepare for the gradual reduction of monetary stimulus from the Federal Reserve.

Conditions are expected to remain volatile into next week as investors await clarity from the Fed at the Jackson Hole Central Bankers’ Summit and maybe well into next month with the U.S. central bank not scheduled to meet until September 21-22.

At the close on Friday, Japan’s Nikkei 225 Index settled at 27013.25, down 267.92, down 0.98%, Hong Kong’s Hang Seng Index finished at 24857.44, down 458.89 or -1.81% and South Korean’s KOSPI Index closed at 3060.51, down 37.32 or -1.20%.

In China, the Shanghai Index settled at 3427.33, down 38.22 or -1.10% and in Australia, the S&P/ASX 200 Index finished at 7460.90, down 3.70 or -0.05%.

The U.S. Federal Reserve will hold its annual research conference in Jackson Hole, Wyoming, August 26-28. Federal Reserve Chairman Jerome Powell is due to give a speech that will be scoured for clues on the central bank’s next steps, according to Reuters.

China Leaves Benchmark Interest Rate Unchanged, as Expected

China left its benchmark interest rate unchanged on Friday for the 16th consecutive month but that did little to dampen expectations authorities will boost stimulus to counter a slowdown in the world’s second-largest economy.

China kept the one-year loan prime rate at 3.85% and five-year LPR at 4.65%. About 78% of traders and analysts polled by Reuters had predicted no change in either rate, but a minority had penciled in a cut to the one-year tenor.

South Korean Stocks Clock Worst Week in Seven Months on Virus, Fed Taper Fears

South Korean shares tumbled more than 1% on Friday and posted their worst weekly decline in seven months, underpinned by persistent worries over the Delta coronavirus variant and prospects of an early tapering by the U.S. Federal Reserve.

The benchmark KOSPI Index posted its lowest close since March 29. It declined 3.49% on a weekly basis, the worst since late January, and after falling 3.03% in the previous week.

Nikkei Falls to 8-Month Low as Toyota Drags Peers, Materials Makers

Japan’s Nikkei stock average closed at a near eight-month low on Friday, dragged down by automakers and their related sectors on growing concerns about a recovery after Toyota cut its global production. For the week, the benchmark Nikkei shed 3.4%, the biggest weekly loss since mid-May.

“Toyota triggered declines in the Nikkei. Today many other shares surrounding Toyota were affected,” said Kentaro Hayashi, senior strategist at Daiwa Securities.

“Toyota’s output cut almost crashed hopes of an economic recovery from the pandemic low.”

Toyota Motor said on Thursday it would slash global production for September by 40% from its previous plan.

For a look at all of today’s economic events, check out our economic calendar.

Stocks Strengthen; Yields, Dollar Rise on Fed Taper Talk

The dollar also scaled a four-month high versus the euro as investors looked ahead to U.S. inflation numbers on Wednesday for indications of when the world’s largest economy might start to withdraw stimulus.

MSCI’s gauge of stocks across the globe gained 0.16%, trading just off the record high it hit last week.

The Dow Jones Industrial Average and S&P 500 both touched record intraday highs.

The Dow Jones Industrial Average rose 171.08 points, or 0.49%, to 35,272.93, the S&P 500 gained 6.27 points, or 0.14%, to 4,438.62, and the Nasdaq Composite dropped 64.83 points, or 0.44%, to 14,795.34.

European shares extended gains for a seventh straight session as investors took comfort from strong earnings reports and economic recovery prospect.

The pan-European STOXX 600 index rose 0.35%

“Domestically and globally, we’re seeing economies recovering from the pandemic. It’s a good period for investing,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

Sentiment was further boosted by the U.S. Senate passing a $1 trillion bipartisan infrastructure bill that could provide the United States with its biggest investment in decades in roads, bridges, airports and waterways.

Activity, meanwhile, was heating up in bond markets.

Indications in recent days of an improving labor market have prompted investors to rethink the outlook for U.S. monetary policy, halting recent sharp falls in both U.S. and European bond yields.

U.S. 10-year Treasury yields scaled their highest in over three weeks, rising as high as 1.336% in London trade and extending the longest run of gains since early February.

The benchmark 10-year Treasury yield, which reached 1.346%, its highest level since July 15, last fell 8/32 in price to yield 1.3439%, from 1.317% late on Monday.

Speculation is mounting that Federal Reserve Chair Jerome Powell could signal it is ready to start easing monetary support in a speech to be delivered at the annual Jackson Hole conference of central bankers.

“Expectations have clearly shifted for Fed Chair Powell to turn hawkish at Jackson Hole and make a formal announcement on tapering asset purchases at the September FOMC meeting,” said Ed Moya, senior market analyst at OANDA in New York.

Adding fuel to the debate, two Fed officials said on Monday that while the labor market still has room for improvement, inflation is already at a level that could satisfy one leg of a key test for the beginning of interest rate hikes.

Data on Monday showed that U.S. job openings shot up to a fresh record high in June and hiring also increased.

That followed Friday’s nonfarm payroll report showing jobs increased by a larger-than-anticipated 943,000 in July.

While signs of economic recovery in the United States are reviving reflation trade bets, investors remain wary of the lingering risks posed by COVID-19.

China on Monday reported more COVID-19 infections in what seems to be its most severe resurgence of the disease since mid-2020, as some cities added rounds of mass testing in a bid to stamp out infections.

MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.4% after trading much of the day in the red as worries weighed about the spread of the Delta variant.

With tapering expectations gaining traction, the dollar extended its gains made on Friday and Monday.

The dollar index rose 0.07%, with the euro down 0.13% to $1.1722.

Oil prices rose, recouping some of the losses in the previous session when prices slipped to a three-week low. [O/R]

U.S. crude oil futures settled at $69.29 per barrel, up $1.81 or 2.72%. Brent crude futures settled at $70.63 per barrel, up $1.59 or 2.3%.

U.S. gold futures settled up 0.3% at $1,731.70.

For a look at all of today’s economic events, check out our economic calendar.

(Additional reporting by Paulina Duran in Sydney Editing by Jonathan Oatis and Mark Heinrich)

 

 

Stocks Marginally Higher as Gold, Oil Declines Spook Sentiment

European shares ticked slightly higher after a mixed start in early trading, as a fall in commodity prices weighed on Britain’s blue-chip index, while other regional indexes stayed near recent highs with earnings season winding down.

The pan-European STOXX 600 index rose 0.06% by 11:35 GMT, after having spent most of the morning in negative territory. Britain’s FTSE 100 index dipped 0.3% and Germany’s DAX 30 edged 0.1% lower.

MSCI’s All Country World Index, which tracks shares across 49 countries, was marginally higher, up 0.06% on the day.

Nasdaq futures slipped 0.1% and S&P 500 futures 0.2%.

Markets were shaken early by a sudden dive in gold, as a break of $1,750 triggered stop-loss sales to take it as low as $1,684 an ounce. It was last down 1% at $1,745.

Brent also sank 2% on concerns the spread of the Delta variant of the coronavirus could temper travel demand.

Holidays in Tokyo and Singapore made for thin trading conditions, adding to the volatility. Yet after an initial fall, MSCI’s broadest index of Asia-Pacific shares outside Japan recovered to be up 0.1%.

They were helped by China’s blue-chip index which added 1.3%. Japan’s Nikkei was shut but futures were trading a modest 20 points below Friday’s close.

Chinese trade data out over the weekend undershot forecasts, while figures out Monday showed inflation slowed to 1% in July, offering no barrier to more policy stimulus.

The U.S. Senate came closer to passing a $1 trillion infrastructure package, though it still has to go through the House.

Investors were still assessing whether Friday’s strong U.S. payrolls report would take the Federal Reserve a step nearer to winding back its stimulus.

“What we’re seeing is a little bit of early profit-taking on the back of fear that tapering will come in earlier in September,” said Sebastien Galy, senior macro strategist at Nordea Asset Management. “But as you can see, it has little impact because the effect of a better economy far outweighs the substitution effect of higher interest rates.”

LONGER TAPER

However, the pace of tapering was still up in the air and would decide when an actual rate increase comes, he said. The Fed is buying $120 billion of assets a month, so a $20 billion taper would end the programme in six months while a $10 billion tapering approach would take a year.

The spread of the Delta variant could argue for a longer taper, with U.S. cases back to levels seen in last winter’s surge with more than 66,000 people hospitalised.

Figures for July CPI due this week are also expected to confirm inflation has peaked, with prices for second-hand vehicles finally easing back after huge gains.

Four Fed officials are speaking this week who will no doubt offer enough grist for markets looking for clues on the timing of tapering.

In the meantime, stocks have been mostly underpinned by a robust U.S. earnings season. BofA analysts noted S&P 500 companies were tracking a 15% beat on second-quarter earnings with 90% having reported.

“However, companies with earnings beats have seen muted reactions on their stock price the day following earnings releases, and misses have been penalized,” they wrote in a note.

“Guidance is stronger than average but consensus estimates for two-year growth suggest a slowdown amid macro concerns.”

Financials firmed on Friday as a steeper yield curve is seen benefiting bank earnings, while also penalising the tech sector where valuations are sky high.

Yields on U.S. 10-year notes were up at 1.28% in the wake of the jobs report, having last week hit their lowest since February at 1.177%.

That jump gave the dollar a broad lift and knocked the euro back to $1.1760, and briefly to its lowest since April at $1.1740. The dollar likewise climbed to 110.22 yen and away from last week’s trough of 108.71.

That took the U.S. currency index up to 92.922 and nearer to the July peak of 93.194.

Oil prices eased further after suffering their largest weekly drop in four months amid worries coronavirus travel restrictions will threaten bullish expectations for demand.

Brent fell 3.7% to $68.09 a barrel, while U.S. crude lost 3.8% to $65.66.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Ritvik Carvalho; Additional reporting by Wayne Cole in Sydney; Editing by Robert Birsel and David Holmes)

 

 

Tech Stocks Boost Asia-Pacific Markets; China Services Sector Growth Accelerates

The major Asia-Pacific stock indexes finished mixed but mostly higher on Wednesday as investors shrugged-off worries over the rapidly spreading coronavirus Delta variant.

Although stocks in Japan finished lower, the other benchmarks were boosted by a private survey that showed accelerating Chinese services activity growth in July. Most indexes advanced to one-week highs with additional help from strong corporate earnings and successful global vaccine rollouts.

Cash Market Performance

On Wednesday, Japan’s Nikkei 225 Index settled at 27584.08, down 57.75 or -0.21%. Hong Kong’s Hang Seng Index finished at 26426.55, up 231.73 or +0.88% and South Korea’s KOSPI Index closed at 3280.38, up 43.24 or +1.34%.

In China, the benchmark Shanghai Index settled at 3280.38, up 43.24 or +1.34% and in Australia, the S&P/ASX 200 Index finished at 7503.20, up 28.70 or +0.38%.

China Shares Rise on Tech Bounce; Concerns over Virus Spread Cap Gains

A bounce back in tech shares lifted up China’s main stock indexes on Wednesday, as a private survey showed faster service sector growth, but worries over surging COVID-19 cases weighed on sentiment, keeping gains in check.

Tech shares rose across the board, with the CSI Info Tech sub-index gaining 2.42%. It fell 2.31% on Tuesday after a state media article described online games as “spiritual opium”. Tech shares recovered even as an opinion article in the ruling Communist Party’s official People’s Daily newspaper said that China should better protect minors from the dangers of the internet.

Providing some support for market sentiment, a private survey showed that growth in China’s services sector accelerated in July, helped by a recovery in consumption. But a surge in domestic COVID-19 cases remains a threat to the growth outlook. China reported the highest number of new locally transmitted cases since January on Wednesday.

South Korea Stocks End at 3-Week High on Strong Foreign Buying in Chip Sector

South Korean shares ended at a near three-week high on Wednesday, driven by strong foreign inflows into chip heavyweights, offsetting worries about rising cases of coronavirus’ Delta variant. Foreigners bought net 914.2 billion won ($799.58 million) worth of shares on the main KOSPI board, the largest daily amount since March 11.

South Korea posted a sharp increase in its coronavirus cases on Wednesday, nearing the record daily infections marked last week, as it struggled to tame its fourth wave of coronavirus.

Nikkei Dips on Delta Variant Anxiety, Toyota Slips after Earnings

Japanese shares dipped on Wednesday as concerns about the rapid spread of the Delta coronavirus variant kept investors on edge, while Toyota Motor succumbed to profit-taking after upbeat earnings.

Concerns about surging COVID-19 cases are mounting as the head of the Japan Medical Association called for a nationwide state of emergency.

Toyota Motor gave up 0.9% after the automaker reported a record quarterly operating profit but maintained its annual guidance.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Stocks Finish Strong as China Shares Surge 2%; Aussie Index Sets Record Close on Afterpay Buyout

The major Asia-Pacific stock indexes finished higher on Monday, as factory data out of China came in well below expectations. Meanwhile, overall sentiment in the region was positive after last month’s weak performance, helped by a sharp rise in shares of Australia’s “buy now, pay later” giant, Afterpay.

In the cash market on Monday, Japan’s Nikkei 225 Index settled at 27781.02, up 497.43 or +1.82%. Hong Kong’s Hang Seng Index finished at 26235.80, up 274.77 or +1.06 and South Korea’s KOSPI Index closed at 3223.04, up 20.72 or +0.65%.

In China, the Shanghai Index settled at 3464.29, up 66.93 or +1.97% and in Australia, the S&P/ASX 200 Index finished at 7491.40, up 98.80 or +1.34%.

China Shares Up after Worst Month in Nearly 3 Years; Hong Kong Ends Higher

Chinese A-share posted their biggest percentage gain since late May on Monday, as investors snapped up stocks battered by a sell-off last month despite rising worries around a surge in new coronavirus cases.

Hong-Kong shares also rose, with the Hang Seng Index ending 1.06% higher after touching its lowest point since early November last month. Chinese H-shares listed in Hong Kong finished up 1.12%.

“Investors across the region are likely following participants buying the dip in Chinese stocks… plus the rise in domestic virus cases may leave further room for the PBOC to ease policy going ahead,” Margaret Yang, a Singapore-based strategist at IG said. “

In economic news, the Caixin/Markit Manufacturing PMI for July released Monday came in at 50.3, much lower than expectations by analysts in a Reuters poll for a reading of 51.1. The Caixin Manufacturing PMI figure had come in at 51.3 in June.

China’s official manufacturing PMI released over the weekend also showed factory activity growth slowing in July, with the figure for the month coming in at 50.4 versus June’s reading of 50.9.

Afterpay Lifts Australian Shares to Record Close

Australian stocks jumped to a record close on Monday, with buy-now, pay-later giant Afterpay leading the charge after it agreed to a $29 billion buyout by Jack Dorsey’s Square Inc in the country’s largest ever deal that also sent its peers higher.

Afterpay settled 19.5% higher after payments firm Square agreed to buy it, creating a global transactions giant and tapping an industry that has boomed over the past year.

Tech stocks jumped 6.5% in their best session since late March 2020, while financials rose 1.9% to their highest close since June 22, with all the “Big Four” banks in positive territory.

For a look at all of today’s economic events, check out our economic calendar.

The Week Ahead – Economic Data, Monetary Policy, and COVID-19 in Focus

On the Macro

It’s quieter week ahead on the economic calendar, with 51 stats in focus in the week ending 6th August. In the week prior, 71 stats had also been in focus.

For the Dollar:

From the private sector, ISM Manufacturing and Non-Manufacturing PMIs for July will be in focus.

Expect the Non-Manufacturing PMI due out on Wednesday to have the greatest impact.

On the labor market front, ADP nonfarm employment change and weekly jobless claims figures on Wednesday and Thursday will also influence.

Nonfarm payrolls at the end of the week, however, will be the key stat of the week.

In the week ending 30th July, the Dollar Spot Index fell by 0.79% to 92.174.

For the EUR:

It’s a busy week on the economic data front.

Private sector PMIs for Italy and Spain together with finalized numbers for France, Germany, and the Eurozone will influence.

Expect Italy and the Eurozone’s PMIs to be key in the week.

German and Eurozone retail sales figures will also influence, with consumption key to a sustainable economic recovery.

For the week, the EUR rose by 0.84% to $1.1870.

For the Pound:

It’s a relatively quiet week ahead on the economic calendar.

Finalized private sector PMIs for July are due out on Monday and Wednesday.

Expect any revisions to the services PMI to have a greater impact in the week.

Construction PMIs also due out, should have a muted impact, however.

While the finalized numbers will influence, the Bank of England monetary policy decision on Thursday will be the main event.

Last week, the IMF talked up the outlook for the British economy. It now rests in the hands of the BoE.

The Pound ended the week up by 1.13% to $1.3904.

For the Loonie:

It’s a busier week ahead on the economic calendar.

Trade data on Thursday and employment change figures on Friday will be the key numbers.

While trade figures will influence, expect the employment change figures to have a greater impact.

The Loonie ended the week up 0.71% to C$1.2475 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

Manufacturing sector data, building permits, retail sales, and trade data will be in focus.

Retail sales and trade data, due out on Wednesday and Thursday, will be the key stats of the week.

On the monetary policy front, however, the RBA monetary policy decision on Tuesday will be the main event.

The Aussie Dollar ended the week down by 0.30% to $0.7344.

For the Kiwi Dollar:

It’s a quiet week ahead. Mid-week, employment change figures will draw interest ahead of inflation expectation numbers on Friday.

With little else for the markets to consider in the week, expect both sets of numbers to provide direction. The markets are expecting a further pickup in inflationary pressures…

The Kiwi Dollar ended the week flat at $0.6974.

For the Japanese Yen:

Finalized private sector PMIs and Tokyo inflation figures will be in focus in the 1st half of the week.

Expect any revision to the PMIs to be of greater influence.

Late in the week, household spending figures will also draw interest.

The Japanese Yen rose by 0.75% to ¥109.720 against the U.S Dollar.

Out of China

It’s a busier day, with private sector PMIs to provide the markets with direction.

Following NBS numbers from the weekend, the market’s preferred Caixin manufacturing PMI will set the tone. Over the weekend, the NBS Manufacturing PMI fell from 50.9 to 50.4…

With service sector activity a greater component of the economy, Wednesday’s services PMI will also influence, however.

The Chinese Yuan ended the week up by 0.31% to CNY6.4614 against the U.S Dollar.

Geo-Politics

Russia and China continue to be the main areas of interest for the markets. News updates from the Middle East will also need continued monitoring…

Japan, South Korean Shares Pressured by Chinese Technology Crackdown, Renewed COVID-19 Concerns

The major Asia-Pacific stock indexes finished lower across the board on Friday, ending a mostly bearish week on a down note. The markets were rattled all week as a Chinese crackdown on its technology sector and rising cases of the Delta coronavirus variant raged against still-dovish monetary policy and mixed earnings from a range of companies.

Friday’s Cash Market Performance

In Japan, the Nikkei 225 Index settled at 27283.59, down 498.83 or -1.80%. In Hong Kong, the Hang Seng Index finished at 25961.03, down 354.29 or -1.35% and South Korea’s KOSPI Index closed at 3202.32, down 40.33 or -1.24%.

China’s benchmark Shanghai Index settled at 3397.36, down 14.37 or -0.42% and in Australia, the S&P/ASX 200 Index finished at 7392.60, down 24.80 or -0.33%.

Nikkei Ends at Over 6-Month Low on Virus Worries, Earnings Lag

Japan’s Nikkei stock average closed at its lowest since the start of the year on Friday as spiking COVID-19 cases, some earnings disappoints and a decline in U.S. stock futures dented investor sentiment.

The Nikkei’s 1.8% decline on Friday was its biggest decline since June 21 and the lowest close since January 6.

For the month, the Nikkei slumped 5.24%, its worst performance since the coronavirus-induced market meltdown in March last year, after recording an 11th straight decline on the final trading day of the month.

In COVID-related news, Japan’s government on Friday proposed extending the state of emergency through August 31 for Tokyo and some other prefectures, as COVID-19 cases spike to record highs.

“The earnings weren’t that bad, but in terms of the outlook, there doesn’t seem to be a lot of confidence,” which is weighing on stocks, said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

“The market is wary that the Nikkei could break below 27,000.”

South Korea Stocks Post Worst Month Since March 2020 on Weak China Shares, Virus Woes

South Korean shares tumbled more than 1% on Friday, and posted its worst monthly decline in more than a year, weighed by continued worries about the Chinese government’s regulatory crackdown and the COVID-19 pandemic.

The KOSPI ended down 40.33 points, or 1.24%, at 3,302.32, its sharpest daily fall in more than two months. The index ended the month down 2.86%, its sharpest monthly decline since March last year, and snapped an eight month winning streak.

In economic news, Friday’s data showed South Korea’s factory output in June rebounded from May on a boost in semiconductor and car production.

In COVID-related news, South Korea reported 1,710 new cases for Thursday, still near the record infections marked this week, even after the country imposed the toughest distancing measures in the metropolitan Seoul area and some neighboring cities.

For a look at all of today’s economic events, check out our economic calendar.

The Weekly Wrap – A Dovish FED and Weak Stats Left the Greenback in the Red

The Stats

It was a busy week on the economic calendar, in the week ending 30th July.

A total of 71 stats were monitored, which was up from 33 stats in the week prior.

Of the 71 stats, 37 came in ahead forecasts, with 30 economic indicators coming up short of forecasts. There were 4 stats that were in line with forecasts in the week.

Looking at the numbers, 42 of the stats reflected an upward trend from previous figures. Of the remaining 29 stats, 27 reflected a deterioration from previous.

For the Greenback, disappointing economic data and a dovish FED left the Dollar in the red. The Dollar Spot Index fell by 0.79% to 92.174. In the previous week, the Dollar had risen by 0.24% to 92.906.

Out of the U.S

Consumer sentiment and durable goods orders drew attention early in the week.

In June, durable goods orders ex transportation rose by 0.3%, following a 0.5% increase in May.

More significantly was a pickup in consumer confidence in July. The CB Consumer Confidence Index rose from 128.9 to 129.1. Economists had forecast a decline to 126.0.

On Thursday, jobless claims and 2nd quarter GDP numbers were in focus. The stats were skewed to the negative, however.

In the 2nd quarter, the U.S economy grew by 6.5%. This fell well short of a forecasted growth of 8.5%.

Jobless claims also fell short of expectations, with initial jobless claims falling from 424k to 400k. Economists had forecast a decline to 370k.

At the end of the week, personal spending and inflation figures came in ahead of forecasts, however.

Personal spending rose by 1.0% in June, with the annual rate of inflation seeing a pickup from 3.4% to 3.5%.

While the stats were material, the FED monetary policy and press conference were the main events of the week.

In line with market expectations, the FED left policy unchanged. The FED Chair also looked to assure the markets that there would be no near-term moves, the guidance considered dovish.

Out of the UK

It was a particularly quiet week. There were no major stats for the markets to consider in the week.

The lack of stats left the Pound in the hands of IMF economic growth forecasts, which delivered Pound support.

In the week, the Pound rose by 1.13% to end the week at $1.3904. In the week prior, the Pound had fallen by 0.14% to $1.3748.

The FTSE100 ended the week up by 0.07%, following a 0.28% gain from the previous week.

Out of the Eurozone

Through much of the week, the German economy was in focus.

Business and consumer sentiment figures delivered mixed results. While business sentiment waned in July, consumer confidence remained unchanged, in spite of the reopening of economies.

Unemployment figures from Germany were upbeat. The unemployment fell from 5.9% to 5.7% in July.

Inflationary pressures continued to surge, however, with Germany’s annual rate of inflation accelerating in July to 3.8%.

At the end of the week, 1st estimate GDP numbers and prelim inflation figures were the key stats of the week.

Quarter-on-quarter, the French economy grew by 0.9% versus a forecasted 0.7% in the 2nd quarter.

Germany saw growth of 1.5%, falling short of a forecasted 1.9%. In the 1st quarter, the economy had contracted by 2.1%.

For the Eurozone, the economy grew by 2.0%, coming in ahead of a forecasted 1.5%. The economy had contracted by 0.3% in the previous quarter.

Inflation also ticked up, aligned with member state numbers. According to prelim figures, the Eurozone’s annual rate of inflation accelerated from 1.9% to 2.2% in July, rising above the ECB’s 2% target.

For the week, the EUR rose by 0.84% to $1.1870. In the week prior, the EUR had fallen by 0.30% to $1.1771.

The DAX30 fell by 0.67%, while the CAC40 and the EuroStoxx600 ended the week up by 0.67% and by 0.05% respectively.

For the Loonie

It was a relatively quiet week on the economic data front.

Inflation and GDP numbers were the key stats of the week.

In June, the annual rate of inflation softened from 2.8% to 2.7%, bucking the trend seen across key economies.

The Canadian economy also continued to struggle in May, with the economy contracting by 0.3%. The economy had contracted by 0.5% in April.

In the week ending 30th July, the Loonie rose by 0.71% to C$1.2475. In the week prior, the Loonie had risen by 0.39% to C$1.2564.

Elsewhere

It was a mixed week for the Aussie Dollar and the Kiwi Dollar.

While the Aussie Dollar fell by 0.30% to $0.7344, the Kiwi Dollar ended the week flat at $0.6974.

For the Aussie Dollar

Inflation was the main area of focus. The stats were mixed, however, pegging the Aussie Dollar back.

In the 2nd quarter, the annual rate of inflation surged from 1.1% to 3.8%. The trimmed mean rate of inflation picked up from 1.1% to 1.6%, however.

Wholesale inflation also saw a pickup but at a softer pace than anticipated.

Australia’s annual wholesale rate of inflation ticked up from 0.2% to 2.2%. Economists had forecast a rate of 3.5%.

For the Kiwi Dollar

It was a busier week, with trade and consumer and business confidence in focus.

Trade data disappointed, with the trade surplus narrowing from NZ$498m to NZ$261m in June. The narrowing stemmed from a more marked increase in imports, however, rather than a fall exports, which limited the damage.

Business and consumer confidence figures were also skewed to the negative. The ANZ Business Confidence Index fell from -0.60 to -3.80, with the ANZ Consumer Confidence Index falling from 114 to 113.1.

The week numbers were not enough to sink the Kiwi.

For the Japanese Yen

It was another relatively busy week.

Early in the week, private sector PMIs were in focus. Later in the week industrial production and retail sales also drew attention on Friday.

While prelim private sector PMIs softened slightly in July, industrial production and retail sales impressed.

Industrial production jumped by 6.2% in June, reversing a 6.5% slide from May. More significantly, retail sales increased by 3.1%, reversing a 0.4% decline from May.

The Japanese Yen rose by 0.75% to ¥109.72 against the U.S Dollar. In the week prior, the Yen had fallen by 0.44% to ¥110.550.

Out of China

It was a quiet week on the economic data front. There were no major stats from China for the markets to consider.

In the week ending 30th July, the Chinese Yuan rose by 0.31% to CNY6.4614. In the week prior, the Yuan had ended the week down by 0.03% to CNY6.4813.

The CSI300 and the Hang Seng ended the week down by 4.98% and by 5.46% respectively.

Asia-Pacific Markets Called Higher on Opening as Investors Hope to Ride Wall Street’s Bullish Wave

A strong performance on Wall Street on Thursday and a rebound in Hong Kong the previous session following a steep plunge earlier in the week is expected to lead to stronger openings in the Asia-Pacific region on Friday.

In the U.S., the major stock indexes rose to record levels as investors shrugged off economic data pointing toward slower-than-expected growth. Investors also showed a delayed reaction to dovish news from the Federal Reserve the previous session.

Many investors were relieved that the Federal Reserve signaled no imminent plans for dialing back asset purchases. Fed Chairman Jerome Powell cautioned that although the economy is making progress towards its goals, it has a ways to go before the central bank would actually adjust its easy policies.

In economic news, U.S. second-quarter gross domestic product accelerated 6.5% on an annualized basis, considerably less than the 8.4% Dow Jones estimate.

Meanwhile, a separate data point showed that 400,000 people filed initial claims for unemployment benefits for the week ended July 24. That level is nearly double the pre-pandemic norm and above a Dow Jones estimate of 385,000.

Asia-Pacific Investors Hoping to Feed Off Wall Street’s Gains

Asia-Pacific investors are hoping to build on gains from Thursday fueled by a rebound in Hong Kong from a two-day slump earlier in the week and after the U.S. Federal Reserve left its benchmark interest rate near zero.

On Thursday, Hong Kong’s Hang Seng Index jumped 3.3% to close at 26,315.32. The index had dived more than 8% over two days early this week.

Meanwhile, Chinese tech stocks in Hong Kong, which were hit hard by the market rout earlier in the week, soared. Shares of Tencent jumped 10.02% while Alibaba gained 7.7% and Meituan climbed 9.49%. The Hang Seng Tech Index soared 8% to 6,958.77.

Helping to ease concerns in the region was the news that China’s securities regulators told brokerages late Wednesday that the country will allow Chinese firms to go public in the U.S. as long as they meet listing requirements, a source familiar with the matter told CNBC.

Traders should pay particular attention to the Australian stock market. Prices should firm because of strength in the energy and gold sectors due to strong gains on Thursday. Crude oil futures settled 1.41% higher. Gold futures posted a 1.54% gain.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Called Mixed to Lower on Opening; Investors Hoping for US Tech Stock Bailout

The major Asia-Pacific stock indexes are called lower on Wednesday, following Wall Street’s weaker lead as the rout on Hong Kong and China tech stocks is expected to resume. Conditions could change ahead of the openings, however, if the U.S. markets can get back on track after key technology companies report their latest quarterly data after the U.S. close.

Shares in the Asia-Pacific region were mixed on Tuesday as the sell-off of major Chinese tech stocks in Hong Kong continued following Monday’s tumble. The broader Hang Seng Index in Hong Kong briefly fell more than 5% in Tuesday afternoon trading (local time) before paring some of those losses, eventually closing 4.22% lower at 25,086.43.

The Hang Seng Index is off more than 8% in just two days of trading this week. On Monday, it was also hit hard, falling more than 4% on the back of regulatory fears surrounding China’s technology and private education sector.

Wall Street Could Fuel Early Session Weakness in Asia-Pacific Region

U.S. stocks fell for the first time in six days on Tuesday ahead of quarterly earnings reports from several megacap technology companies. The blue chip Dow Jones Industrial Average decline 170 points. The benchmark S&P 500 Index fell 0.8%, led by weakness in consumer, technology and energy sectors. The NASDAQ Composite retreated 1.6%. The drop in the major averages from their respective records reached on Monday could bring an end to their five-session winning streaks.

Of concern for Asia-Pacific traders will be the U.S. market’s reaction after the closing bell in New York. Second-quarter earnings season will kick into high-gear with Google-parent Alphabet, Microsoft and Apple set to report after the bell on Tuesday. The trio of tech heavyweights is down about 1% each ahead of their numbers.

Fedwatch Continues

Investors are awaiting the Federal Reserve’s update on its monetary policy as the central bank’s two-day meeting began. The Federal Open Market Committee will release a statement when the meeting concludes Wednesday, followed by Chairman Jerome Powell’s news conference.

Since the Fed will make its announcements at 18:00 Wednesday, Asia-Pacific traders won’t have a chance to react to the news until Thursday’s opening.

Nikkei Closes Below 28,000 Level for Second Day

Japanese equities rose on Tuesday, tracking overnight gains on Wall Street as investors cheered upbeat corporate earnings, but the benchmark Nikkei 225 failed to close above the 28,000 key psychological level for a second straight session.

Like Monday, the Nikkei briefly traded above that level but pared gains before the close amid caution ahead of this week’s Federal Reserve policy meeting and a pick-up in both the U.S. and Japanese earnings seasons.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Mostly Lower; Hong Kong Down Over 4%; Japan Bucks Trend with Modest Gain

The major Asia-Pacific stock indexes are trading mixed but mostly lower with Japanese stocks bucking the overall trend as investors returned following holidays on Thursday and Friday.

One of the catalysts behind the selling pressure was tensions between Washington and Beijing as the two economic powerhouses kicked off high-level meetings. Another reason for the shift in sentiment was heightened regulator pressure from the government on Chinese tech and education stocks. Additionally, investors continued to monitor the COVID situation in Asia, particularly its potential influence on the pace of the economic recovery.

Cash Market Performance

In the cash market on Monday, Japan’s Nikkei 225 Index settled at 27833.29, up 285.29 or +1.04%. Hong Kong’s Hang Seng Index finished at 26192.32, down 1129.66 or -4.13% and South Korean’s KOSPI Index closed at 3224.95, down 29.47 or -0.91%.

In China, the benchmark Shanghai Index settled at 3467.44, down 82.96 or -2.34% and in Australia, the S&P/ASX 200 Index finished at 7394.30, down -0.10 or 0.00%.

China Shares Tumble on Regulatory Clampdown; Education Firms Selloff Heavily

China shares fell sharply to their lowest levels this year on Monday as investor worries over the impact of government regulations kneecapped the education and property sectors, after Beijing barred for-profit tutoring in core school subjects.

The shakeout in China’s $120 billion private tutoring sector follows Beijing’s announcement on Friday of new rules barring for profit tutoring in core school subjects to ease financial pressures on families. The policy change also restricts foreign investment in the sector through mergers and acquisitions, franchises, or variable interest entity (VIEs) arrangements.

Hong Kong Stocks Fall as China Technology Crackdown Continues

Stocks in Hong Kong were pressured on Monday after China’s antitrust regulator ordered Tencent to give up its exclusive music licensing rights and slapped a fine on the company for anti-competitive behavior, as Beijing continues to crack down on its internet giants at home.

The latest regulatory crackdown comes as Beijing continues to curb the power of its domestic technology firms that have grown to become some of the most valuable companies in the world.

China’s widening clampdown has ranged from anti-competitive practices, to data security as well as increased scrutiny on Chinese companies with overseas listings in the U.S.

Nikkei Tracks Global Peers Higher, but Virus Woes Undermine Mood

Japanese shares ended higher on Monday, catching the tailwind from a bounce in global peers on positive corporate earnings, though gains were curbed by concerns that domestic COVID-19 infections could further dampen the country’s economic recovery.

The country’s benchmark Nikkei 225 Index rose after a four-day weekend that marked the opening of Tokyo Olympics before shedding a part of the gains into the close.

Australia Shares End Flat as Energy, Gold Stocks Drag

Australian shares pulled back from record highs to end flat on Monday as gains in mining stocks were offset by losses in energy and gold stocks, while rising domestic coronavirus cases also added to investor worries.

Mining stocks jumped as much as 1.5%, boosted by strong iron ore prices as a recovery in steel margins in China buoyed sentiment. Meanwhile, energy stocks dropped 1.4% as oil prices fell on concerns about fuel demand from the spread of COVID-19 variants and floods in China. Finally, gold stocks fell to their lowest since April 7, hurt by weak bullion prices, with the largest-listed gold miner Newcrest losing 1.5%.

In COVID-related news, the most populous state of New South Wales, home to Sydney, on Monday reported a rise in fresh COVID-19 cases despite an ongoing stay-at-home order.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Settle Mixed; China Down on Regulatory Concerns, Aussie Stocks Close at Record High

The major Asia-Pacific stock indexes closed mixed on Friday, but mostly higher with China and Hong Kong markets taking a hit on renewed regulatory concerns. Also contributing to the mixed mood following a volatile trading week was a drop in investor sentiment on rising concerns over the pace of global growth tied to the COVID Delta variant outbreak.

Cash Market Performance

In the cash market on Friday, Japan’s Nikkei 225 Index settled at 27548.00, up 159.84 or +0.58%. Hong Kong’s Hang Seng Index finished at 27321.98, down 401.86 or -1.45% and South Korea’s KOSPI Index closed at 3254.42, up 4.21 or +0.13%.

In China, the benchmark Shanghai Index settled at 3550.40, down 24.34, down 0.68% and in Australia, the S&P/ASX 200 Index finished at 7394.40, up 8.00 or +0.11%.

China Shares Fall amid Renewed Regulatory Fears

Chinese tech firms listed in the city tumbled after Bloomberg News reported that Beijing is considering harsh penalties on ride-hailing giant Didi. The penalties being planned range from a fine likely bigger than the record $2.8 billion Alibaba paid earlier this year to even a forced delisting after Didi’s IPO last month.

Shares of Didi stateside plunged more than 11% on Thursday. Earlier in July, the firm was forced to stop signing up new users and also had its app removed from Chinese app stores due to alleged collection and use of personal data.

That development came as Beijing continues its months-long crackdown on China’s tech behemoths, targeting issues from anti-trust to data regulations.

Hong Kong Stocks Fall as Tech, Education and Property Shares Drop

Hong Kong stocks fell on Friday, dragged down by technology, education and property shares, as deepening concerns over Beijing’s tighter regulations weighed on sentiment.

The Hang Seng Tech Index slumped nearly 3% to the lowest closing level since October, 2020.

New Oriental Education & Technology Group Inc’s Hong Kong-traded shares plunged 41% to a record low, amid deepening concerns over China’s crackdown on tutoring businesses.

China will crack down on after-school tutoring businesses and ban listings of tutoring institutions, according to a soft copy of government document circulating on social media. Reuters was unable to immediately verify its authenticity.

Hong Kong-listed property shares also fell as worries over tough regulations linger. Chinese local governments should strictly control financing for property developers, including bank loans and improve land pricing mechanisms, state television quoted Vice Premier Han Zheng as saying on Thursday.

Australian Shares End at Record High on Healthcare, Tech Boost

Australian shares closed at a record high after a choppy afternoon trade on Friday, as gains in healthcare and tech stocks slightly outweighed losses in financial and energy firms.

Healthcare stocks added 1.3% and led gains on the benchmark index. The closing marked a fourth positive finish in the past five sessions.

Australian tech stocks followed suit, firming nearly 1% on strong cues from their Wall Street peers overnight.

For a look at all of today’s economic events, check out our economic calendar.