Morning Markets: Iron ore shoots to four-month high
Watchlist
- EU: Euro area inflation flash estimate (0900 GMT)
- EU: Unemployment (0900 GMT)
- Italy: Provisional CPI (0900 GMT)
- South Africa: Trade balance (1200 GMT)
- US: ISM-Chicago business survey - Chicago PMI (1345 GMT)
- US: Pending home sales (1400 GMT)
Strong data out of the Chinese construction sector pushed iron ore prices to a four-month high Monday with the Australian materials sector gaining 2% on the rise.
China’s non-manufacturing PMI climbed to 62.5 for July, its highest level since December 2013.
The gains seen in Sydney were broadly matched by APAC indices with Tokyo's Topix rising 0.2% and the Hang Seng up 0.5%. South Korea's Kospi index rose by 0.11%.
Shares of HSBC rose by as much as 3% in Hong Kong after the firm announced a $2 billion share buyback for 2017 alongside strong H1 results, with earnings per share coming in ahead of forecasts at $0.35.
Also in Hong Kong, Hutchison Telecommunications shares gained as much as 14.5% on news that the company's fixed-line business will be sold for $1.9bn to Asia Cube Global Communications.
The Japanese yen is nearing a six-week high above 110.50 versus USD as Tokyo announced rising industrial production.
On today's data calendar, we have the European Union reporting flash inflation estimates and unemployment at 0900 GMT while the US will release its latest ISM Chicago Business Survey data at 1345 GMT.
Market signals
Asian session
- China’s non-manufacturing PMI climbed to 62.5 for July
- China's Manufacturing PMI slowed in July to 51.4 while its Services PMI dipped to 54.5
- Russia expelled nearly 800 US diplomats as the dispute over sanctions widened
- Japan's monthly Preliminary Industrial Production rose 1.6% in June as expected
- Traders will be watching geopolitical developments in the Korean peninsula
- This follows a missile test by North Korea on Friday
- Australia's new-home sales fell sharply in June, down 6.9% from May
- Australia's MI inflation gauge edged up 0.1% in June
- The RBA announcement is due out tomorrow; it is expected to leave rates unchanged
- The Reserve Bank of India is expected to cut rates on Wednesday
- The stalled copper price rally looks set to resume; the red metal has hit a two-year high
Forex ahead
- USD lost ground against the yen; it was worth just ¥110.4650 at 0259 GMT
- The Aussie fell before the release of Chinese data before recovering
- AUD was trading at 0.7974 at 0714 GMT
- USDCAD is on the rise as oil consolidates with the pair approaching 1.25.
From the Floor
CPI on watch. "Inflation remains the only thing preventing the European Central Bank from tightening policy," says Boye
Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.
In opinion
1..2..3
Inflation in the Eurozone is on track to remain steady at 1.3% in the year to July, offering fresh support for the ECB's reluctance to begin tightening monetary policy, writes James Picerno.
Lucky for some
The ECB and Fed will be reworking models ahead of the release of updated economic projections in September. The Fed will like what it sees; the ECB not so much, explains Max McKegg.
Heavy load
It's a heavy data week ahead with PMIs being reported across the board. As well there will be a keen eye kept on USD weakness, says Kay Van-Petersen in today's Macro Monday.
Golden moves
Gold edged higher in early Asian trade after gaining for the third consecutive week on Friday, writes Saxo's Sydney trading team.
Big sell signal
After lifting the Nasdaq 100 to a record high, sellers took control on Thursday and knocked it lower, forming a technical top and reversal pattern on the chart, says Kim Cramer Larsson.
Volatile FX
Forex volatility roared back to life in the latter part of last week, with the US dollar taking a beating against most G10 currencies, and could persist throughout this week, writes Michael O'Neill.
Morning Markets goes out on the TradingFloor platform at 0700 GMT, Monday to Friday.
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