Article / 05 September 2017 at 7:01 GMT

Morning Markets: Asia-Pac stocks mixed, RBA keeps rates steady

Consulting editor / TradingFloor



  • Australia: Balance of payments (published)
  • Australia: RBA cash rate decision (published)
  • Switzerland: GDP (published)
  • Switzerland: CPI (0715 GMT)
  • France: Services PMI (0750 GMT)
  • Germany: Services PMI (0755 GMT)
  • Eurozone: Services PMI (0800 GMT)
  • UK: CIPS/Markit Services PMI (0830 GMT)
  • EU: Retail trade (0900 GMT)
  • South Africa: GDP (0930 GMT)
  • Poland: Monetary policy meeting (0959 GMT)
  • US: Manufacturers' shipments, inventories and orders (1400 GMT)

Asia-Pacific equity markets were mixed in nervous trading on Tuesday, with worries about North Korea's latest nuclear test blast lingering and with no clear sense of direction due to Monday's US Labor Day holiday.

Japan's Nikkei 225 and Korea's Kospi Composite index fell, but the Shanghai Composite and Hong Kong's Hang Seng scored modest gains.

The Reserve Bank of Australia held its cash rate steady at 1.50% — unchanged for a 13th consecutive month — as widely expected. The RBA noted that the Australian dollar has appreciated in recent months, partly reflecting a lower US dollar, and said the higher exchange rate is expected to contribute to subdued price pressure and weigh on the outlook for output and employment. "An appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast," the RBA said in its statement.

The US on Monday asked the UN to respond to North Korea's weekend test of its largest nuclear device with "the strongest possible measures" to force the regime to end its weapons programme.

A barrage of European manufacturing data, including manufacturing PMIs from France, Germany, the Eurozone as a whole and the UK, is slated for Tuesday.

Market signals

Asian session

  • Asian markets lacked direction, with Wall St closed for the Labor Day holiday on Monday
  • The mountain that N. Korea conducts its tests under could collapse: China scientist
  • A collapse could lead to a disastrous spread of radiation across northeast Asia
  • Investor anxiety hurt stocks in Tokyo, Seoul and Sydney
  • Japan's Nikkei 225 was down by a hefty 0.58% to 19,394.71 at 0520 GMT
  • Korea's Kospi Composite was down 0.27% to 2,323.37 at 0521 GMT
  • Hong Kong's Hang Seng and China's Shanghai Composite made modest gains
  • People's Bank of China has declared the bitcoin offering illegal
  • Australia's current account deficit rose to $A9.6bn in the June quarter
  • But Aussie exports grew faster than expected in the quarter
  • Reserve Bank of Australia kept rates on hold yet again, at 1.5%
  • S&P/ASX200 clawed back early losses; down 0.02% to 5,700.70 at 0539 GMT

Forex ahead

  • USD lost ground against the safe-haven yen; it was worth ¥109.3240 at 0542 GMT
  • Balance of payments data gave AUD a lift; it was worth 0.7962 at 0541 GMT

From the Floor

Brexit breather? "The negotiator said the last round of Brexit talks may be delayed – these talks have really bogged down, the UK having no leverage," says Hardy.

Muted stocks. “One wonders if it is quiet before the storm – the [US-North Korea] rhetoric is escalating,” says Garnry.

Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.

In opinion

Spot ore pauses
The spot physical iron ore market has taken a breather, despite strong steel prices in China, says the team at Saxo Capital Markets Australia.

ECB's predicament
ECB policymakers meet on Thursday amid sluggish Eurozone inflation and an appreciating euro that could soon begin to harm European economic growth, says Christopher Dembik.

Parisian waiter

 Tuesday's macroeconomic data include service-sector PMIs from France; 
Germany, the Eurozone as a whole and the UK. Photo: Shutterstock

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