Article / 14 August 2017 at 7:00 GMT

Morning Markets: Asia-Pacific stocks gain as North Korea fears ease

Consulting editor / TradingFloor
Norway







MM TABLE

 

Watchlist

  • Japan: First preliminary quarterly GDP estimate (published)
  • China: Industrial output (published)
  • China: Fixed-assets investment (published)
  • Portugal: GDP flash estimate (0830 GMT)
  • Greece: GDP flash estimate (0900 GMT)
  • EU: Industrial production (0900 GMT)

Most major Asia-Pacific stock markets rose on Monday as jitters over a potential US conflict with North Korea subsided, but still linger.

Japan's Nikkei, which had been closed on Friday for a holiday, played catch-up and fell against the improving trend elsewhere on Monday. Korea's Kospi Composite rebounded from Friday's selloff, and Hong Kong shares jumped, led by Internet giant Tencent.

US stocks bounced on Friday, at the end of a week of losses inflicted by a fiery exchange of words between US president Donald Trump and North Korea that took Wall Street to its sharpest weekly slide since March.

Japanese GDP grew 4% year-on-year in the second quarter, the fastest pace in more than two years and a sixth consecutive quarter of expansion as domestic demand picked up.

Chinese economic indicators started the third quarter on a sour note, with retail sales, industrial production and fixed asset investment all slowing more than expected in July after outperforming in June.

US electric car maker Tesla boosted the size of its bond sale on Friday to $1.8 billion amid solid demand for the offering.

Soft US consumer price growth in July, reported on Friday, kept the US dollar on the back foot.

Market signals

Asian session

  • Some Asian markets headed cautiously higher as investor jitters over N. Korea eased
  • But tensions weighed on the Nikkei 225; it was down 0.91% to 19,551.12 at 0521 GMT
  • Japan's GDP expanded at an annualised rate of 4% in Q2, the fastest rate in two years 
  • Korea's Kospi rebounded from Friday's slump; it was up 0.56% to 2,332.66 at 0454 GMT
  • Stocks surged in Hong Kong, led by internet giant Tencent
  • Hong Kong's Hang Seng was up 0.95% to 27,138.44 at 0542 GMT
  • China's industrial production rose 6.4% in the year to July, lower than the 7.1% expected
  • China's fixed asset investment rose 8.3% in the year to July; 8.6% was expected
  • Retail sales in the year to July rose 10.4% in China; 10.9% was forecast
  • The CEO of Australia's CBA has announced plans to retire at the end of this financial year
  • Australia's S&P/ASX200 was up 0.70% to  5,733.10 at 0542 GMT
  • Bitcoin reached a new record high on the weekend at $4,225.40 before retreating
  • New Zealand's quarterly retail sales rose 2% in June; 0.7% was expected
  • Nasdaq-listed electric car maker Tesla upped its bond sale to $1.8bn
  • China's financial watchdog has imposed a $1.6mln fine on US banking giant Citi

Forex ahead

  • JPY softened against USD after Japan's GDP figures were announced
  • USD was worth ¥109.5955 at 0543 GMT
  • AUDUSD slipped below 0.7888 on disappointing China data, to 0.7893 at 0542 GMT

From the Floor

Rebound. "Risk bounces back on no further escalation in North Korea, so stocks generally trading higher above the board," says Bresler.

Soft USD. "With weak [US] CPI print on the headline, saw EURUSD traders trying to re-engage the uptrend," says Hardy.

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

In opinion

1..2..3
Industrial production in the Eurozone is expected to fall for the first time in four months in June, writes James Picerno, adding the weakness should only be considered temporary.

Escalating tensions
Geopolitical tensions are escalating in the wake of sanctions imposed on North Korea, writes Andrew Bresler in this week's Macro Monday.

Sentiment rollercoaster
Some Asian markets made gains today, thanks to bargain hunters, while lingering global jitters pushed others lower, says Saxo APAC sales trading.

Shelter from the storm
Sharp rhetoric between the US president and North Korea this week boosted demand for gold, the yen and secure bonds while high-yield bonds and stocks were hit, writes Ole Hansen

Rationale
Top-tier economic data this week could add some fundamental rationale to FX moves, and that may temper the impact of the Trump-North Korea spat, says Michael O'Neill.


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 Japanese growth soared to a dizzying 4% rate in the June quarter, thanks to a welcome pick-up in domestic demand in Asia's second largest economy. Photo: Shutterstock

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