Article / 15 June 2016 at 7:00 GMT

Morning Markets: Green shoots spied in Asia



  • US: New York Fed Manufacturing Index (1230 GMT) 
  • US: Industrial Production (1315 GMT) 
  • Federal Reserve Forecasts & FOMC Statement (1800 GMT)

Equity markets are showing signs of a cautious recovery after shares in Tokyo escaped a four-day losing streak and ended modestly higher, helped by a weaker yen. But the underlying tone remains tinged with Brexit fears and the yield on the bellwether 10-year bund future has only just managed to claw its way above zero having pitched into the negative zone yesterday.

Otherwise, today's session will unfold under the guiding stars of central banks: The Fed's latest policy-setting meeting concludes with a statement and press conference at 1800 GMT but no fireworks are foreseen, given recent jobs data and the proximity of the UK referendum. In the early afternoon a brace of European Central Bankers (Jens Weidemann and Vitor Constancio) will deliver speeches while Bank of Canada governor Stephen Poloz will get his chance on the podium at 2230 GMT.

Overnight in China, there was some disappointing news from MSCI: the index decided to delay including China's domestic A shares in its emerging markets indices. But equity investors in Shanghai shrugged off the news, with the Shanghai Composite making substantial gains. Finally, in Australia, Brexit uncertainty helped drive the S&P/ASX below 5,200 points.

Market signals

Asian session
  • Japan's Nikkei 225 was up 0.71% to 15,970.96 at 0526 GMT
  • MSCI will delay including Chinese A shares within its emerging markets indices
  • The index provider will revisit its decision on Chinese shares in 2017
  • Chinese investors shrugged off the MSCI rejection, with shares making gains in Shanghai
  • The Shanghai Composite was up by a hefty 1.44% to 2,883.12 at 0543 GMT
  • Hong Kong's Hang Seng was up 0.19% to 20,426.91 at 0545 GMT
  • Korea's Kospi Composite was down by a slim 0.06% to 1,970.83 at 0526 GMT
  • India's S&P BSE Sensex was up 0.36% to 26,490.16 at 0549 GMT
  • Australia's S&P/ASX200 fell below 5,200; it was down 0.84% to 5,159.70 at 0547 GMT
  • Australian consumer sentiment fell 1% in June, according to the Westpac MI index
  • New Zealand recorded a healthy $NZ1.3bn current account surplus in Q1
  • The S&P/ASX200 closed down 0.94% at 5,154.20

Forex ahead

  • The US dollar failed to make gains vs. the yen; it was worth ¥106.1785 at 0550 GMT
  • The MSCI delay pushed the yuan lower; the currency has fallen below a five-year low
  • The Australian dollar held above 0.73; it was worth 0.7374 at 0551 GMT
  • The New Zealand dollar was worth 0.7021 at 0550 GMT

From the Floor

Markets to shrug. "It's hard to see the FOMC saying anything worth listening to," Hardy.

Equity gain. "The theme ahead of the Brexit vote is to sell on strength," Garnry.

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

In opinion

Manufacturing surveys show US industry is on a low, but data shows US industrial production is moving out of its trough. Either way, there's no hike coming, says James Picerno

Left out
MSCI has decided not to include China's domestic equities in its benchmark indices, at least for now, write Saxo's Singapore trading team.

Seeing red 
Even though Australia is 12,000 kilometres away from Europe, the ASX feels the pain of Brexit uncertainty – but at least the AUD is holding onto recent gains, says Saxo's Australian team


Brexit jitters go global ... The land down under may be far from Europe, but Australian equities are feeling plenty of pain from uncertainty about Britain and the EU. Photo: iStock

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