- JPY strengthens as stimulus package disappoints
- AUDUSD managed a recovery in Asian trading
- Caterpillar beat estimates and rose by 5.2%
By Saxo APAC Sales Trading
- Markets were range-bound ahead of the run of central bank meetings, starting with the Federal Open Market Committee. US data releases underscored the improved tone to the economy.
- In the equity space an exception to the generally small movements seen across most markets was Japan, where the Nikkei shed 1.4% driven by yen strength.
The near-term setup for USDJPY
suggests additional retracement is due after failing to extend above the 106.85/107.05 area (late-June peak/January down-trend line). Near-term support enters at the 104.00/103.75 area, while the more immediate downside bias should remain intact against the 105.42/73 resistance zone.
managed a recovery in Asian trading, but it did end up failing just above its minor swing 15-day moving average (0.7533 – no close above since 18 July). It was able to reverse what had been a run of two closes underneath both its major swing 33 (0.7484) and 100 (0.7486) day moving averages, but that bullish signal can easily be overwhelmed by today’s June quarter CPI release, where the market is looking for CPI trimmed mean of 0.4%.
, the failure against the 0.7305/0.7400 resistance zone highlights the potential for a deeper corrective phase. However, a sustained break of the critical 0.6973/63 support zone and mid-to-late June lows is necessary to confirm the downside risks
Foreign exchange movements
Despite a low probability of a rate hike of less than 10%, for a second consecutive day, auction demand of US Treasuries
drew a weak demand in years before central-bank decisions this week. US Treasury also closed almost flat.
Five-year yields were close to a one-month high as the Treasury sold $34 billion of the maturity at steeper yields than indicated in pre-auction.
Yield between the US two-year notes against similar maturity UK gilts also jumped to its highest since May 2000 as the Federal Reserve was boosted by its economic data in recent weeks.
US stocks recovered to close narrowly mixed overnight amid mixed earning data. The Dow Jones Industrial Average shed 19.31 points to 18,473.75. The S&P 500 crept up 0.10 of a point to 2,169.18. Winning sectors were materials and industrials, both up 0.7%, while telecoms (-1.5%) suffered the biggest loss.
United Technologies rose by 3.1% after reporting better adjusted Q2 EPS of $1.82 (Mkt est: $1.68). Net sales crept up 1.3% to $14.87bln.
Caterpillar rose by 5.2% even reported adjusted Q2 EPS tumbled to $1.09 from $1.40 a year ago and revenue dived 16% to $10.34bln. However, both data were better than market estimation of $0.96 and $10.11bln.
Apple (-0.7%) reported Q3 EPS of $1.42 (Mkt est: $1.39), down from $1.85 a year earlier. Revenue fell to $42.4bln (Mkt est: $42.1bln), from $49.6bln a year ago. The stock is rallying the best part of 5% in early late action.
European stocks edged higher as investors digested a flood of corporate earnings and showed caution ahead of key central bank meetings later in the week. FTSEurofirst 300 index tickled up 0.15%, to 1,346.96, with Healthcare outperformed. While in London the FTSE 100 tacked on 0.2%, to 6,724.03.
German lender Commerzbank sank 4.5% after it reported a decline in Q2 core capital.
BP declined 1.3% after the oil giant reported Q2 underlying earnings of $720mln that fell well short of analyst consensus ($839mln).
- Advantest (6857 JP) 1Q 2.3b yen (4 analysts) 2pm
- Alps Electric (6770 JP) 1Q 4.4b yen (3 analysts) 2pm
- CapitaLand Retail China Trust (CRCT SP) 2Q
- Chudenko Corp (1941 JP) 1Q 2pm
- Colopl Inc (3668 JP) 3Q 2pm
- Daibiru (8806 JP) 1Q 1pm
- Daiwa Securities Group (8601 JP) 1Q 2pm
- Fanuc (6954 JP) 1Q 33.6b yen (3 analysts) 2pm
- Fujifilm (4901 JP) 1Q 38b yen (3 analysts) 2pm
- Great Eastern Holdings (GE SP) 2Q
- H2O Retailing Corp (8242 JP) 1Q 2pm
- Hangzhou Robam Appliances (002508 CH) 2Q
- Hitachi Chemical (4217 JP) 1Q 10.4b yen (4 analysts) 3:30pm
- Hitachi Construction Machinery (6305 JP) 1Q 2pm
- Hitachi High-Technologies (8036 JP) 1Q 2:30pm
- Hutchison Port (HPHT SP) 2Q
- Hyundai E&C (000720 KS) 2Q 125.8b won (13 analysts)
- Hyundai Glovis (086280 KS) 2Q 125.6b won (12 analysts)
- Hyundai Heavy (009540 KS) 2Q 130.3b won (11 analysts)
- Hyundai Wia (011210 KS) 2Q 81.1b won (19 analysts)
- Innocean Worldwide (214320 KS) 2Q 18.6b won (9 analysts)
- Japan Aviation Electronics (6807 JP) 1Q 2pm
- Kyudenko Corp (1959 JP) 1Q 2pm
- LINE Corp (3938 JP) 1H 2pm
- Misumi Group (9962 JP) 1Q 3pm
- Mitsubishi Motors (7211 JP) 1Q 4.7b yen (3 analysts) 4pm
- Nintendo (7974 JP) 1Q 2.5b yen loss (5 analysts) 3pm
- Nissan Motor (7201 JP) 1Q 173.7b yen (8 analysts) 3pm
- Nissan Shatai (7222 JP) 1Q 3pm
- NTN (6472 JP) 1Q 3pm
- OBIC Business Consultants (4733 JP) 1Q 1pm
- Obic (4684 JP) 1Q 6.0b yen (3 analysts) 2pm
- Senshu Ikeda Holdings (8714 JP) 1Q 3pm
- SGX (SGX SP) FY S$356.7m (17 analysts) aft-mkt
- SMFG (8316 JP) 1Q
- Stanley Electric (6923 JP) 1Q 2pm
- Sumitomo Dainippon Pharma (4506 JP) 1Q 2:30pm
- Takara Bio (4974 JP) 1Q 2pm
- Takara Holdings (2531 JP) 1Q 2:30pm
- West Japan Railway (9021 JP) 1Q 2pm
- Zeon Corp (4205 JP) 1Q 6.1b yen (3 analysts) 11am
Stocks to watch
- Hengdeli (3389 HK): Expects 6-mo. profit to fall ~65%
- Huayi Tencent (419 HK): Expects to report 6-mo. net loss of not more than HK$60m
- Leshi Internet (300104 CH): Affiliate LeEco acquires Vizio for $2b
- PetroChina (857 HK): Parent CNPC posts 1st-half profit on cost cuts
- Asahi (2501 JP): 1H profit beats own forecast on Japan boost
- Canon (7751 JP): 2Q oper. profit misses forecast; full-year forecast cut 12% to 265b yen
- Nidec (6594 JP): Said to lead bids for Emerson’s $1b motors unit
Southeast Asia highlights
- British American Tobacco Malaysia Bhd. (ROTH MK):
- Reported 78% drop in 2Q net income to 47.7m ringgit
- Mapletree Commercial Trust (MCT SP): To raise more than $1.02b from new units to part-fund acquisition; declares 1Q DPU 2.03c
Australia's June quarterly inflation number came in at 0.4% as expected. Photo: iStock
– Edited by Gayle Bryant
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