Asian markets felt the ripple of Gary Cohn’s resignation as high-yielding bets were sold.
Meanwhile, a disappointing GDP report dragged the Aussie even lower across the board.
- Australia’s GDP slows down from 0.7% to 0.4% in Q4 2017
- Japan’s leading indicators up by 104.8% vs. 106.5% expected, 107.4% previous
- Nikkei is down by 0.74% to 21,258.9;
- Australia’s A SX 200 is down by 1.20% to 5,899.5;
- Shanghai index missed the memo with its 0.14% gain to 3,294.243, and
- Hang Seng dipped by 0.35% to 30,403.0.
- Gold is down by 0.01% to $1,334.52;
- Brent crude oil is down by 0.49% to $65.24, and
- U.S. WTI is down by 0.40% to $62.09.
- 7:45 am GMT: France’s trade balance report
- 8:00 am GMT: Switzerland’s foreign currency reserves
- 8:30 am GMT: U.K.’s Halifax house price index (0.4% expected, -0.6% previous)
- 10:00 am GMT: Euro Zone’s revised GDP to remain at 0.6%?
Australia’s GDP release
Data from the Land Down Under showed the economy had grown by 0.4% in Q4 2017, which is slower than the expected 0.5% uptick and Q3’s 0.7% increase in the previous quarter.
This translates to a 2.4% economic growth for the year of 2017, a tad lower than the upwardly revised 2.9% expansion in Q3’s report and expectations of a 2.5% growth.
Turns out, household consumption (+0.6%) and government spending (+0.3%) contributed to the GDP while non-dwelling construction (-0.5%) and trade activities (-0.4%) were drags.
While the report missed its headline estimates, some analysts pointed out that the strength in household consumption helps ease the RBA’s concerns over trends of low wages and higher household debt.
Trade war fears come back with a vengeance
The resignation of U.S. Chief Economic Adviser Gary Cohn might have missed the closing bell for U.S. equities, but that didn’t stop Asian players from pricing it in!
Concerns that the POTUS would take a hard stance against Uncle Sam’s major trading partners and even cause a global trade war came back with a vengeance today and dragged equities and commodities with it.
Dollar aversion and risk sentiment played havoc on gold’s price action, while oil prices extended their decline thanks to risk aversion and a bearish API report from the previous session.
Major Market Mover(s):
JPY and CHF
Traders flocked to low-yielding currencies like the yen and franc on uncertainty over the U.S. trade position.
USD/JPY is down by 49 pips (-0.46%) to 105.65;
USD/CHF is down by 37 pips (-0.39%) to .9370;
EUR/JPY is down by 43 pips (-0.33%) to 131.21;
EUR/CHF is down by 30 pips (-0.26%) to 1.1638;
GBP/JPY is down by 56 pips (-0.38%) to 146.80, and
GBP/CHF is down by 40 pips (-0.31%) to 1.3021.
The Loonie was triple roundhouse-kicked by NAFTA concerns, lower oil prices, and overall risk aversion.
USD/CAD is up by 52 pips (+0.41%) to 1.2927;
CAD/JPY is down by 69 pips (-0.84%) to 81.73;
EUR/CAD is up by 86 pips (+0.54%) to 1.6055, and
GBP/CAD is up by 85 pips (+0.48%) to 1.7962.
AUD and NZD
The Aussie was one-two punched by Australia’s GDP miss and overall risk aversion, while the Kiwi also took some hits.
AUD/USD is down by 25 pips (-0.32%) to .7803;
AUD/JPY is down by 64 pips (-0.77%) to 82.44;
AUD/CHF is down by 51 pips (-0.70%) to .7312;
NZD/USD is down by 9 pips (-0.13%) to .7282;
NZD/JPY is down by 44 pips (-0.57%) to 76.93;
GBP/NZD is up by 39 pips (+0.21%) to 1.9080, and
NZD/CHF is down by 34 pips (-0.50%) to .6823.