Asian equities flat

19 October, 2017

Asian equities flat

Equities across the Asian markets were trading in a tight narrow range on Thursday, ignoring solid Chinese data and the new records on Wall Street, where the Dow Jones Industrial Average breached 23,000. FX markets are also struggling for direction, as traders look for signals from EU politics and who will lead the Federal Reserve.

China’s economic growth meet expectation

China’s GDP expanded 6.8% in the third quarter, slightly below the previous period of 6.9%, but still well above the full-year target of 6.5%. At the beginning of 2017, most of the discussion about the Chinese economy was a “soft vs. hard landing.” However, the economy continues to grow at healthy levels, despite the government shifting the focus on the quality of growth vs. quantity. This gives Xi Jinping more leverage, as he seeks to grab greater power over the next 5 years. In other economic releases, retail sales and industrial production both beat expectations, coming at 10.3% and 6.6% respectively. Meanwhile, investment growth dipped to 18-year low.

Will Rajoy trigger article 155?

Euro traders are waiting to see if Prime Minister Rajoy will trigger article 155, if Catalan President Puigemont does not clarify what he meant in his speech last week. The deadline is 8:00 am GMT, so expect to see some volatility in the Euro as the European trading session kicks off. It is still unclear  how this story will develop but triggering article 155, would likely lead to the declaration of independence and this is will undoubtedly be negative news for the single currency.

U.K. retails sales and EU summit

U.K. retail sales is the only tier one economic release in Europe today. Despite falling real wages, spending remained robust in the previous months. Economists expected retail sales to fall 0.1% last month, but figures from the British Retail Consortium, showed that like-for-like sales grew 1.9% in September, thus expect an upside surprise in today's release. However, this does not necessarily mean Sterling will rally.  Brexit concerns will likely remain the primary driver when EU leaders meet later today. The probability of “no-deal” is increasing, and investors should be prepared for the worst. A hard Brexit scenario will not only drag sterling lower but it will probably take European indices with it.

Dow above 23,000 despite Mnuchin warnings

U.S. Treasury secretary Steve Mnuchin has warned that stocks will fall significantly if Congress doesn’t pass tax reforms. Maybe he’s right. The Dow Jones Industrial Average and S&P 500 rallied more than 25% and 20% respectively, and it’s doubtful that this rally was only based on economic growth and earnings expectations. It seems the odds of tax reforms occurring this year, or in the first quarter of 2018 are 50/50, so risks are broadly symmetrical.  


Source link  
USD stages comeback on CPI and retail data

It's been a positive day for US economic data as retail sales surprised analysts lifting to 0.2% (0.0% exp). This shows a strong build up in the period...

Currencies bound ahead of Fed decision

It is a quiet Wednesday in the currency markets. Traders are favoring to remain on the sidelines ahead of multiple key risk events...

Inflation continues to worry FED

FOMC minutes were released today and painted some interesting pictures on the state of the US economy. So far FED members are calling for...


Pound struggles on uncertanity

Conviction in the pound seems to have fallen off the way side after the most recent days of trading with the pound taking further hits as it slides...

Geopolitical risks return to the front seat

Demand for safe havens returned on Monday as war of words between North Korea and the U.S. triggered flight to safety amongst investors...

RBA minutes offer guidance on economy

The Australian economy has hit the spotlights as the Reserve Bank of Australia meeting minutes are out. As usual it's quick to point the finger...


Softened sanctions on North Korea

Investors returned from the weekend with a high appetite for risk assets, sending the S&P 500 to a new record high on Monday, with global equities...

AUD traders bet on RBA minutes

The Australian dollar has surged in Monday trading as it looked to push through a key level of resistance at 0.7833, this is a bit of a surprise...

Investors on the sidelines

With the absence of any top tier news and the markets waiting for further indications on the Fed’s policy when Janet Yellen testifies before Congress...

  


Share: