Asian session traders took cues from their U.S. counterparts to take on more risky assets as they move away from the global trade war rhetoric.
- U.K. BRC retail sales monitor (y/y) up by 1.1% vs. 2.8% gain in May
- AU NAB business confidence down from 7 to 6 in June
- China’s CPI (y/y) up from 1.8% to 1.9% as expected in June
- China’s PPI (y/y) improves by 4.7% vs. 4.5% expected, 4.1% previous
- Japan’s preliminary machine tool orders (y/y) rose by 11.4% vs. 14.9% gain in June
China’s data releases
Consumer prices in the world’s second largest economy rose by 1.9% from a year earlier in June after rising by an annualized rate of 1.8% in May. That’s the fastest rate since March, yo!
Turns out, food prices rose at a faster pace while cost of non-food products also inched higher.
Core inflation also clocked in at 1.9% and matched May’s numbers. On a monthly basis, prices had risen by 0.1% after a 0.2% decline in May.
Meanwhile, a separate release showed producer prices rising by 4.7% and hitting a six-month high in June.
A closer look tells us that factory prices for both production materials and consumer goods shot up, with the former contributing 4.61% to the total price increase. Oil and natural gas exploration saw the biggest price increase, followed by processing of oil, coal and other fuel and ferrous metal smelting and pressing.
Overall, the reports point to the possibility of seeing higher consumer prices not only for China’s downstream sectors, but also prices abroad.
Improved risk sentiment
Asia’s equity traders caught up to the U.S.-based traders in focusing less on the U.S.-China trade war and more about their optimism over the earnings season.
Nikkei got an extra boost from a weaker yen and gained ground for a third day in a row. China’s indices, however, are still a tiny bit concerned about the impact of Uncle Sam’s latest tariff additions.
- Nikkei is up by 0.94% to 22,260.4
- A SX 200 is down by 0.61% to 6,281.2
- Hang Seng is up by 0.41% to 28,807.1
- Shanghai index is down by 0.05% to 2,813.712
Uncertainty over Brexit negotiations and a slightly weaker dollar boosted gold prices earlier today. Meanwhile, crude oil inched higher on the back of oil workers conducting strikes in Norway.
- Gold is up by 0.12% to $1,259.17
- Brent crude oil is up by 0.32% to $78.42
- U.S. WTI is up by 0.05% to $74.01
Major Market Mover(s):
AUD and NZD
Aussie and Kiwi bulls shrugged off less-than-stellar releases from Australia and New Zealand to price in a risk-friendly vibe in the markets.
AUD/USD is up by 8 pips (+0.11%) to .7473; AUD/JPY is up by 26 pips (+0.32%) to 83.01; AUD/CHF is up by 14 pips (+0.19%) to .7416, and AUD/CAD is up by 21 pips (+0.22%) to .9805.
NZD/USD is up by 8 pips (+0.12%) to .6845; NZD/JPY is up by 27 pips (+0.36%) to 76.04; NZD/CHF is up by 16 pips (+0.23%) to .6793, and NZD/CAD is up by 21 pips (+0.24%) to .8981.
Like in the previous session, the low-yielding yen took hits across the board on the back of risk appetite higher U.S. Treasury yields (for USD/JPY).
USD/JPY is up by 26 pips (+0.23%) to 111.10; USD/CHF is up by 10 pips (+0.10%) to .9924; USD/CAD is up by 15 pips (+0.11%) to 1.3121, and GBP/USD is down by 18 pips (-0.14%) to 1.3238.
Watch Out For:
- 7:45 am GMT: France’s industrial production (0.7% expected, -0.5% previous)
- 9:00 am GMT: Italy’s industrial production (0.9%, -1.2% previous)
- 9:30 am GMT: U.K.’s GDP report (Read our mini trading guide about it!)
- 9:30 am GMT: U.K.’s manufacturing production (1.0% expected, -1.4% previous)
- 9:30 am GMT: U.K.’s goods trade balance (-11.9B GBP expected, -14.0B GBP previous)
- 9:30 am GMT: U.K.’s industrial production (0.5% expected, -0.8% previous)
- 10:00 am GMT: Germany’s ZEW economic sentiment (-17.9 expected, -16.1 previous)