Article / 23 August 2017 at 7:00 GMT

Morning Markets: Asian stocks rally broadly with Wall St boost

Consulting editor / TradingFloor




  • Singapore: CPI (published)
  • France: Flash PMI (0700 GMT)
  • Germany: Flash PMI (0730 GMT)
  • South Africa: CPI (0800 GMT)
  • Eurozone: Flash PMI (0800 GMT)
  • US: Flash manufacturing PMI (1345 GMT)
  • US: New home sales (1400 GMT)
  • EU: Flash consumer confidence indicator (1400 GMT)
  • US: EIA weekly petroleum status report, incl. crude oil stocks (1430 GMT)

Asian shares rallied broadly on Wednesday when Japan's Nikkei rebounded from three days of losses with help from Tuesday's gains on Wall Street as US political worries took a back seat for a change.

The picture in Asia-Pacific bourses was, however, mixed. Tokyo's Nikkei 225 gained 0.3%, but Shanghai stocks were only flat, earnings disappointment weighed on Sydney's S&P/ASX200, and Hong Kong cancelled its trading session as typhoon Hato hit the city.

The US dollar firmed to varying degrees against Asia-Pacific currencies ahead of the Fed's August 24-26 Jackson Hole conference. The Hong Kong dollar approached a decade low.

US stocks jumped on Tuesday, with political tensions in Washington easing on reports that the Trump administration is making progress in drafting a tax reform bill. The stock market chose to shrug off worries even ahead of president Donald Trump's political rally in Arizona.

The UK will soften its stance on new legal rules for Brexit on Wednesday by proposing only to end the “direct jurisdiction” of the European Court of Justice after leaving the EU while accepting that EU judges could still play a role in settling disputes, according to news reports.

A blast of manufacturing data (flash PMIs) are awaited from France, Germany, the Eurozone as a whole, and later today from the US. And European Central Bank president Mario Draghi is scheduled to speak in Germany.

Market signals

Asian session

  • Japan's Nikkei 225 rebounded after three days of declines
  • Japan's manufacturing PMI soared to 52.8 in August, a three-month high
  • Hong Kong cancelled its morning trading session as typhoon Hato hit the city
  • Gains on Wall St lifted sentiment in Asian markets, as political tensions took a back seat
  • South Korea rejected US demands in bilateral trade talks
  • The US imposed sanctions on Russian, Chinese firms and individuals over N. Korea
  • Australian corporates reported mixed earnings, with some falling short of expectations
  • Earnings disappointment weighed on Australia's S&P/ASX200
  • Trump warned of government shutdown if he doesn't get to build a border wall with Mexico
  • Spot gold rose as high as $1,286.72/oz after the remarks, from as low as $1,282.94 earlier 

Forex ahead

  • The NZ dollar retreated on lower GDP growth, budget surplus forecasts
  • The US dollar fell against the yen after Trump's comments on government shutdown

From the Floor

Broad rally. “Risk took its lead from the US overnight – stocks higher across the board, with a few exceptions,” says Bresler.

Trump tax reform. “One of the reasons for the [stock market] rally is that Trump is going to try to bang through some kind of a tax reform, including repatriation,” says Hardy.

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

In opinion

Both Europe and the US seem to be enjoying moderate growth in the big sectors that count -- even if new homes sales in the US showed a surprise decline, says James Picerno.

Woolies pays up
If you want to get investors interested, just pay out big despite your profits, which is why shares in the grocery chain Woolworths lifted this morning, says Saxo's Australian team.

AUDNZD rally
AUDNZD rallied on the back of weakness in the New Zealand dollar, and it's testing new highs, says the Singapore-based team at Saxo APAC Sales Trading

EURUSD corralled
The 1.1700 area is pivotal for EURUSD, with stops likely below, which means 1.1500 could pop into view if the ECB's Draghi chastens the euro bulls, writes John J Hardy.

Airbus factory

 Airbus factory, Toulouse, France. Wednesday's macroeconomic data include flash 
PMIs from the US, France, Germany and the Eurozone as a whole. Photo: Shutterstock

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