The Aussie and Kiwi took the brunt of a bit of profit-taking after Asian session traders shrugged off positive trade developments seen in the previous sessions.
- Japan’s retail sales (y/y) slips from 1.7% to 1.5% vs. 1.3% expected in July
- New Zealand’s ANZ business confidence slides lower from -44.9 to -50.3
- Australia’s private capital expenditures (q/q) drops by 2.5% vs. 0.6% growth expected
- Australia’s building approvals down by 5.2% vs. -2.2% expected, 6.8% previous
New Zealand’s disappointing reports
The Kiwi started the session on a weak note thanks to a batch of worse-than-expecting reports from New Zealand.
First, building consents dropped by a whopping 10.3% in July, faster than the 8.2% decline we saw in June. While the report is usually a volatile one, the back-to-back declines did NOT give traders happy pills.
Meanwhile, business confidence dropped by another 5 points in August. In a report titled “spooked,” ANZ detailed that manufacturing is the least confident sector while the service industry is the most optimistic.
Australia’s data misses
Australia didn’t do much better in terms of economic releases.
For one thing, the quarterly private capital spending dipped by 2.5% when analysts had expected a 0.6% increase. More importantly, components that contribute to the GDP, such as plant and equipment (-0.9%), manufacturing (+2.7%), mining (-7.2%) and services (-1.0%) mostly saw declines.
And then there’s July’s business approvals, which dropped by 5.2% after rising by 6.8% in June. For comparison, analysts had only seen a 2.2% drop for the report.
Markets ignore trade global trade updates
No China? Not our problem! Asian session market players mostly ignored positive developments in the NAFTA and Brexit-negotiations.
In case you missed it, Donald Trump himself is optimistic that we could see a trilateral deal as early as the end of the working week when Canada is expected to agree to handshake deals after days of negotiations.
Meanwhile, the EU looks like it’s ready to offer Britain a unique partnership, something that eased investors’ uncertainties and will help in advancing the Brexit negotiations.
Unlike in the London and U.S. sessions, however, Asian market players weren’t that impressed. Instead, they continued to worry about the (lack of) progress in the U.S.-China trade war.
Word around the hood is that the U.S. will make time for negotiations with China after it finishes with its NAFTA counterparts, but for now, the uncertainty isn’t doing wonders for the Asian bourses.
- Nikkei is up by 0.17% to 22,887.0
- A SX 200 is down by 0.33% to 6,363.9
- Shanghai index is down by 0.81% to 2,746.852
- Hang Seng is down by 0.61% to 28,242.6
Gold prices slipped along with other assets, though crude oil prices were cushioned by a larger-than-expected decrease in crude oil inventories printed in the U.S. session.
- Gold is down by 0.23% to $1,204.03
- Brent crude oil is down by 0.04% to $77.24
- U.S. WTI is down by 0.01% to $69.66
Major Market Mover(s):
AUD and NZD
Disappointing reports and concerns over the unresolved U.S.-China trade war weighed heavily on the Aussie and Kiwi.
AUD/USD is down by 23 pips (-0.32%) to .7287; AUD/JPY is down by 29 pips (-0.36%) to 81.34; AUD/CHF is down by 20 pips (-0.28%) to .7074; EUR/AUD is up by 44 pips (+0.27%) to 1.6057, and GBP/AUD is up by 68 pips (+0.38%) to 1.7883.
NZD/USD is down by 54 pips (-0.80%) to .6659; NZD/JPY is down by 61 pips (-0.82%) to 74.37; NZD/CHF is down by 48 pips (-0.73%) to .6465; GBP/NZD is up by 175 pips (+0.90%) to 1.9567, and AUD/NZD is up by 59 pips (+0.54%) to 1.0942.
Watch Out For:
- 6:00 am GMT: Germany’s import prices (0.0% expected, 0.5% previous)
- Germany’s preliminary CPI (0.1% expected, 0.3% previous)
- 7:00 am GMT: Switzerland’s KOF economic barometer
- 7:00 am GMT: Spain’s flash CPI (y/y) to remain at 2.2%?
- 7:55 am GMT: Germany’s unemployment change (-8K expected, -6K previous)
- 8:30 am GMT: U.K.’s mortgage approvals (65K expected, 66K previous)
- 8:30 am GMT: U.K.’s net individual lending (5.5B GBP expected, 5.4B GBP previous)