Article / 12 August 2016 at 6:59 GMT

Morning Markets: Sizzling Wall St. sparks Asia gains




  • Eurozone Q2 Gross Domestic Product (0900 GMT)
  • US retail sales for July (1230 GMT)
  • US University of Michigan Consumer Sentiment for August (1400 GMT)

Where Wall Street leads, Asia follows. At least that was the case at the start of trading in Asia on Friday, with gains on several bourses in the wake of a record performances for US equity indexes on Thursday. 

Unfortunately data from China spoiled the party for some, with disappointing releases for industrial production, retail sales and fixed-asset investment. Asia's leading economy is unlikely to meet its hopeful GDP goals unless Beijing can take steps to boost growth.

But back here in Europe, the news this morning is far brighter: Germany is growing faster than anybody thought. This continent's largest economy beat estimates with a 0.4% expansion in gross domestic product in the second quarter, taking the year-on-year pace to +1.8% (seasonally adjusted). Improved trade flows were behind the advance. 

Market signals

Asian session

  • The Saudi oil minister raised hopes of useful talks on output curbs at Opec next month
  • Gains on Wall St and the Saudi comments boosted oil prices and lifted sentiment in Asia
  • Japan's Nikkei 225 surged higher; it was up a robust 1.13% to 16,924.72 at 0507 GMT
  • China's industrial production rose just 6% in July; retail sales rose 10.2% in the month
  • China's fixed-asset investment was 8.1% from January to July
  • All three China data releases fell short of expectations
  • China's Shanghai Composite was up 0.1% to 3,009.59 at 0523 GMT
  • Hong Kong's Hang Seng index was up by 0.66% to 22,730.15 at 0525 GMT
  • Korea's Kospi Composite lost early gains; it was down 0.05% to  2,047.87 at 0430 GMT
  • The mIners helped drive an early surge on the ASX that later ran out of puff
  • The S&P/ASX200 was up by a slim 0.07% to 5,511.60 at 0526 GMT
  • Australia has blocked plans by Chinese companies to invest in energy infrastructure
  • That follows a similar UK move to stop a state-backed Chinese energy investment
  • Bombings in a Thai resort town caused a fatality; Thai tourism could suffer

Forex ahead

  • The US dollar nudged higher against the yen; it was worth ¥101.9650 at 0524 GMT
  • The Australian dollar slipped just below 0.77, but held onto most of its recent gains
  • The Aussie dollar was worth 0.7687 at 0523 GMT

From the Floor

Leg room. “Looking at one-year USDCNH, it looks like there is still room to go higher”, says Horchani.

Oil rally. “The Saudis intervened after what looks like clear frustration at the slow progress of the oil market in rebalancing”, says Hansen.

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

In opinion


With interest rates low and employment high, US retail should pick up, but personal income has not risen fast enough to sustain large retail sales gains, warns Juhani Huopainen.

Crude reality check
Traders are hopeful that the Saudi Arabia can take steps to curb crude output at Opec talks next month, but any deal that leaves out arch-rival Iran is doomed to fail, warns Michael O'Neill.

China's shocker
One year one from a surprise Chinese devaluation Martin O'Rourke looks back on a worrying series of events.

 Slow growth in store ... Shoppers may still be flocking to upmarket outlets along Nanjing Rd in Shanghai, above, but national retail data for July has fallen short of expectations. Photo: iStock

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