Rise and shine everyone and Happy Monday!
Thankfully, it’s a quiet Monday with not much in store in terms of economic data. We have Zoom reporting after market close.
US Equity Futures are higher this morning looking for that relief rally. Oddly, yields are also higher with the Yield Curve steepening again to -0.66%. The USD Index is marginally lower. Gold marginally higher, Oil higher, and Bitcoin lower.
Asia and Australia
Asian equities finished mixed Monday. Hang Seng and Shanghai lost more ground as PBOC disappointed with smaller-than-expected LPR cuts sending both to YTD lows. Japan held on to modest gains, Australia drifted lower into the close.
China saw yet another marginal cut to their rates. This time the 1-year LPR (Loan Prime Rate) was cut by a mere -10bps to 3.45% against an expectation of a -15bps cut. The 5-year rate remained unchanged at 4.2%. Yet again, we see a situation where the intervention simply isn’t enough and the market showed its disappointment.
Bank of Thailand likely to pause on rates following slower-than-expected GDP data. Thailand's economy expanded at slower-than-expected 1.8% in Q2 y/y, below consensus of 2.1% and Q1's 2.6%. Coupled with the political instability in the country, Thailand has become a place to avoid for global investors.
Australian LNG workers give notice of industrial action, risking strike if Wednesday's round of bargaining is unsatisfactory. Keep an eye on rising NatGas prices today.
South Korea's exports fell 16.5% yr/yr during the first 20 days of August with chip exports falling 24.7%.
Europe, Middle East, Africa
European equity markets higher. Energy, Consumer Products/Services and Healthcare lead; Real estate and Construction/Materials lag.
Energy leading in European trade as crude prices firmed on global supply tightening with lower exports from Saudi Arabia and Russia offsetting concerns about demand growth amid high interest rates.
German PPI comes in cooler than expected and better than previous month. YoY PPI dropped -6% and MoM PPI dropped -1.1%.
Bundesbank published its monthly report, on the German economy which said economy still in weak growth phase after stagnating in Q2. Highlighted that weak foreign demand and increased financing costs weighing on economy.
UK housebuilders amongst main decliners in European trade as latest data from property portal Rightmove showed UK asking prices for home sellers falling at the fastest rate since summer 2018.
Ukraine is close to a deal with global insurers to cover grain ships traveling to and from its Black Sea ports. This could certainly ease Wheat prices.
The Americas
Goldman Sachs noted that its Equity Sentiment Indicator, which aggregates nine different positioning metrics into one aggregate score, was +0.8 last week, down from the +1.5 average over the 16-Jun to 28-Jul period. Added that hedge fund leverage has come down to 64% from the 72% peak for the year seen at end of July.
US consumers have drawn down more than $2T in pandemic-era excess savings, adding headwind to consumer spending
Goldman Sachs is weighing the sale of a part of its wealth business catering to high net worth clients.
USD/JPY looks to resume upside momentum to start the new week. JPMorgan sees Japan's threshold for yen intervention at around 150 yen per dollar
Calendars
(news taken from Reuters, FT, Bloomberg; Calendar from Trading Economics and Benzinga Pro)
