Morning Report APAC: Oil extends gain, stocks flat pre-ECB decision
- Oil rose on reduced inventory data from EIA
- US JOLTS report showed robust labour market growth
- US Beige Book showed modest economic growth and slight inflation pressure
- USD found firmer footing, CAD rallied, GBP sold off
- Probability of rate cut at Thursday's ECB meeting about 10.6%
By Saxo APAC Sales Trading
Economic data of the day (Singapore Time)
1230: JPY – Bank of Japan's Hiroshi Nakaso makes a speech at ACCJ in Tokyo
20:30: EUR – ECB President Mario Draghi holds a press conference
US: US Jolts report showed robust labour market growth, which should please the US Federal Reserve. The much-watched quits rate remained stable at 2.1% for the month.
US Beige Book overnight showed modest economic growth, slight inflation pressures and tight labour markets, a carbon copy of the month before.
Canada: Bank of Canada surprised with a dovish statement today, noting that the risk to inflation has tilted to the downside since July and that financial vulnerabilities associated with household imbalances remain elevated. It did suggest growth was expected to pick up, however the market took the statement as dovish and CAD sold off.
Europe: German industrial production unexpectedly declined by 1.2% y/y, versus an expected increase of 0.2%.
UK: UK industrial production beat expectations, 2.1% vs 1.9%, but manufacturing production missed at 0.8% vs 1.7% expected y/y.
Mark Carney spoke in front of the Treasury select committee yesterday, with the only highlight being his comment that the Bank of England could cut rates further as well as expand term funding scheme, if needed.
USD found firmer footing after the Asian trading session. CAD rallied from 1.2823 to a high of 1.2914 post the dovish Bank of Canada statement. GBP sold off post Carney’s meeting with the Treasury select committee.
Emerging Markets traded on firm footing throughout the Asian session with KRW trading to its strongest level since May 2015. However, as the USD stabilised, the weaker of the EM complex began to sell off (ZAR, TRY, MYR).
Foreign exchange movements
The S&P 500 and Dow lost a little ground, while the Nasdaq Composite closed at a record high as tech stocks rallied, lifted in part by Apple Inc. which rose 0.6% after unveiling the iPhone 7 at its flagship product event in San Francisco.
Chipotle Mexican Grill Inc. jumped 5.9% after Bill Ackman’s Pershing Square Capital Management LP late on Tuesday disclosed it has bought a 9.9% stake in the fast-food chain.
Germany’s DAX 30 index struggled to hold out a gain of 0.2% after German industrial production fell 1.5% in July, as manufacturing output declined.
Volkswagen AG rose 1%, with the German car maker in advanced talks with a Chinese auto maker, China Anhui Jianghuai Automobile Co., to produce electric cars in the country.
Greater China highlights
China Singyes Solar (750 HK): To pull out of northern market: SCMP
Longfor Properties (960 HK): Substantial holder to sell 150m shares
MMG (1208 HK): Hires Goldman Sachs to advise on Golden Grove: The Australian
Asahi (2502 JP), Kirin (2503 JP): Both have registered to bid for a stake in Vietnam’s Sabeco; Asahi rated new market perform, Kirin underperform at Bernstein
NTT Data (9613 JP): Profit may rise 20bn yen on accounting shift: Nikkei
- Japan Display (6740 JP): Expects positive free cash flow this year: Nikkei
Southeast Asia highlights
Astra Intl (ASII IJ): Unit plans to sell 2.1tn rupiah bonds
Vinamilk (VNM VN): Company in talks to buy another US company: CEO
Telkom Indonesia (TLKM IJ): NEC wins undersea cable order from company: Nikkei
Rumours of an oil output freeze are losing power to support prices. Photo: iStock
– Edited by Susan McDonald
This report was compiled by the Saxo APAC Sales trading team in Singapore – the home of social trading. Follow the team on @SaxoStrats or post your comment below to engage with Saxo Bank's social trading platform. Follow us on @SaxoStrats on Twitter
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