Article Highlights

  • Japan current account surplus up from 1.41T JPY to 1.65T JPY in June
  • Japan’s bank lending up from 2.0% to 2.1% in July
  • AU ANZ jobs ads down by 0.8% vs. 0.4% uptick in June
  • China’s trade surplus pops up from 311B CNY to 343B CNY in July
  • China’s trade surplus (in USD) up to 52.4B in July vs. 48.1B in June
  • Japan’s Economy Watchers’ sentiment up from 41.2 to 45.1 in July
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The Greenback gave up some of its gains against its major counterparts, as a bit of risk appetite hit the Asian bourses following last Friday’s NFP release.

Major Events:

China’s trade data – Data from the world’s second largest economy reflected weaker exports AND imports for the month of July. In yuan terms, China’s exports is up by 2.9% from a year earlier in July after popping up by 1.3% in June. Meanwhile, imports registered a 5.0% decline for the month, faster than the 2.3% drop in June. This translated to a 342.8B CNY surplus, up from the 311.12B CNY figure in June.

It’s the dollar-denominated numbers that caught more investor attention though. See, the yuan weakened by as much as 0.3% against the dollar for the month, which kinda cushions the more realistic trade figures.

Exports is down by an annualized figure of 4.4% in July, which is just a bit better than the 4.8% decline in June. Imports fell by a whopping 12.5% though, much higher than June’s 8.4% drop, and contributed to a trade surplus of $52.4B against June’s $48.1B figure. Naturally, the trade numbers raised concerns that China’s companies are just starting to feel the pinch of weaker global and domestic demand.

Overall risk appetite – Not even China’s iffy trade numbers were enough to rain on the market bulls’ parade though. Thanks to last Friday’s NFP raising chances of a Fed rate hike and the yen dropping against most of its counterparts, the Asian bourses ended the day in the green.

Nikkei is up by 2.44%, Hang Seng is up by 1.21%, China’s Shanghai Index is up by 0.20%, and Australia’s ASX is up by 0.70%.

Major Market Movers:

USD – The low-yielding dollar was smacked around by its higher-yielding counterparts on a bit of risk appetite in the markets.

EUR/USD is up by 22 pips (+0.20%) to 1.1103, GBP/USD is up by 8 pips (+0.06%) to 1.3087, and USD/CAD is down by 15 pips (-0.11%) to 1.3169.

NZD – The New Zealand dollar saw downward spikes early in the session after research firm BNZ upped its RBNZ rate cut forecasts to at least three more 0.25% cuts by November.

NZD/USD slipped to a low of .7087 before capping the session with a 24-pip loss (-0.34%) to .7113. NZD/JPY also fell to 72.37 before closing with a 21-pip drop (-0.29%) to 72.57 and EUR/NZD shot up 1.5649 before levelling off with an 88-pip rise (+0.57%) to 1.5612.

Watch Out For:

  • 6:00 am GMT: German industrial production (0.9% expected, -1.3% previous)
  • 7:15 am GMT: Swiss CPI (-0.5% expected, 0.1% previous)
  • 8:30 am GMT: Euro Zone Sentix investor confidence (3.6 expected, 1.7 previous)

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