Morning Markets: Asia stocks flat after Yellen repeats go-slow tone
Watchlist
- Singapore: Advance GDP estimates (published)
- Ireland: GDP (1000 GMT)
- US: Advance monthly retail sales (1230 GMT)
- US: CPI (1230 GMT)
- US: Industrial production and capacity utilisation (1315 GMT)
- US: University of Michigan consumer sentiment survey (1400 GMT)
Asian stocks were flat to cautiously higher on Friday after the Dow reached a fresh high overnight on the back of a second day of dovish testimony to Congress from Fed chief Janet Yellen.
Asian stock markets overall had their best week since March, though the picture on Friday was mixed, with Japan's Nikkei up less than 0.1%, while the Shanghai Composite was just a whisker into negative territory.
Yellen told the Senate banking committee on Thursday that it was still too early to conclude whether recently soft inflation readings meant that the underlying inflation trend was falling short of 2%.
Yellen's message was largely a repetition of her Wednesday testimony, reaffirming the "go-slow" signal that the Fed is on track to keep raising interest rates gradually.
Markets keenly await June US retail sales and CPI on Friday as fresh input for the Fed.
Next week brings, among other things, a European Central Bank meeting on Thursday.
Market signals
Asian session
- Yellen's comments may have stimulated a reckless surge in US equities
- But Asian investors took a more cautious approach in the last trading day of the week
- Nikkei 225 made modest gains; up 0.16% to 20,131.89 at 0522 GMT
- Hang Seng rally ran out of puff; up just 0.06% to 26,361.73 at 0541 GMT
- Korea's Kospi Composite made modest gains; up 0.09% to 2,411.72 at 0522 GMT
- Shanghai Composite retreated; down 0.24% to 3,210.36 at 0516 GMT
- S&P/ASX200 headed higher for a second day, helped by gains for Australian banks
- S&P/ASX200 was up 0.29% to 5,753.30 at 0540 GMT
- Singapore dodged recession in Q2, with growth of 0.4%; the economy shrank in Q1
- US demands renegotiation of its free-trade deal with South Korea
Forex ahead
- High-yield currencies, including AUD and NZD, added to recent gains
- Kiwi soared again; NZD was worth 0.7324 at 0538 GMT
- AUD rose to near a four-month high; it was worth 0.7742 at 0538 GMT
- USD regained some ground against the yen; it was worth ¥113.4210 at 0539 GMT
From the Floor
Dovish Fed. "The Fed is seen as dovish and not caring about financial markets for the time being," says Hardy.
Oil stuck. "We’re seeing the oil market continuing to be boxed in," says Hansen
Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.
In opinion
1...2...3
The Fed sees low CPI as transitory, but when it stops describing inflation in this way, that's when it realizes it must take its foot off the tightening pedal, predicts Juhani Huopainen.
Iron ore resurgence
Iron ore has hit its highest since the start of May, thanks to Chinese steel mills; the rise will benefit the likes of BHP and Rio Tinto, says the team at Saxo Capital Markets Australia.
Oil's woes
Monthly updates from major energy-sector organisations this week have highlighted the problem of rising Opec production and falling compliance with output curbs, writes Ole Hansen.
Putin's put-down
The first meeting between presidents Trump and Putin led to a deal on Syria's partition into zones for which Putin received back-tracking and mild humiliation in return, says Nadia Kazakova.
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