It was a pretty choppy day for the Asian markets, as traders price in mixed signals from the U.S. and traders take profits ahead of the Trump-Xi meeting this weekend.
- Tokyo’s core CPI (y/y) up by another 1.0% vs. 1.1% expected, 1.0% previous
- Japan’s unemployment rate inched higher from 2.3% to 2.4% vs. 2.3% expected
- Japan’s preliminary industrial production jumps by 2.9% vs. 1.3% expected, -0.4% previous
- Australia’s private sector credit maintains 0.4% growth as expected in October
- China’s manufacturing PMI dips from 50.2 to 50.0 in November
- China’s non-manufacturing PMI lower from 53.9 to 53.4 in November
- Japan’s consumer confidence weakens from 43.0 to 42.9 in November
- Japan’s housing starts (y/y) grew by 0.3% vs. 0.4% expected, -1.5% previous
China’s PMI misses
The first gauges of China’s manufacturing and services sectors missed analysts’ expectations and underscored concerns of a slowing economy amidst weaker global demand and the U.S.-China trade war.
China’s official manufacturing PMI dipped for a third month in a row in November, clocking in at 50.0 when markets had expected another 50.2 reading.
Weaknesses were seen across the board as new orders grew at a slower pace; new export orders shrank for a sixth straight month, output expanded the least in nine months. Meanwhile, the orders in hand and employment components continued to contract.
The non-manufacturing sector didn’t look much better. The PMI plunged to a 15-month low of 53.4 in November, weaker than the expected 53.8 reading and October’s 53.9 index figure.
Last but not the least, the composite PMI, which covers both manufacturing and services activity, slipped to 52.8 in November, from October’s 53.1 figure.
Today’s numbers emphasized the negative impact of the U.S. tariffs on China’s goods and puts more pressure on President Xi Jinping to make progress on a U.S.-China trade deal ahead of more tariffs scheduled to take effect at the start of 2019.
Mixed market moves
Asian equities mostly shrugged off a weak Wall Street performance in favor of optimism and a bit of profit-taking ahead of the Trump-Xi meeting happening this weekend.
Buying is limited, however, by mixed signals from the White House over the outcome of the talks. If you recall, Trump shared that he’s hoping to make a deal with China but that he also “like[s] the deal we have right now.”
Of course, it also didn’t help that China’s official PMI reports underscored Beijing’s need to address the negative impact of the U.S.-China trade war.
- Nikkei is up by 0.32% to 22,333.7
- A SX 200 is down by 1.31% to 5,685.6
- Shanghai index is up by 0.23% to 2,573.414
- Hang Seng is up by 0.69% to 26,633.9
Commodity bulls didn’t have trouble partying in the streets. Gold prices were mostly flat as the dollar steadied, while crude oil benchmarks extended their gains on speculations that OPEC and Russia would agree to production cuts next week.
- Gold is up by 0.05% to $1,224.66
- Brent crude oil is up by 0.82% to $60.18
- U.S. WTI is up by 0.72% to $51.60
Major Market Mover(s):
A bit of optimism enabled the Kiwi to rake in even more gains.
NZD/USD is up by 10 pips (+0.14%) to .6868; NZD/JPY is up by 6 pips (+0.08%) to 77.88; EUR/NZD is down by 19 pips (-0.11%) to 1.6590; GBP/NZD is down by 26 pips (-0.14%) to 1.8608; NZD/CHF is up by 17 pips (+0.24%) to .6844, and AUD/NZD is down by 14 pips (-0.13%) to 1.0656.
There were no direct catalysts to drag down the franc, but optimism in the European region might have weighed on the low-yielding currency’s prospects.
USD/CHF is up by 12 pips (+0.12%) to .9964; GBP/CHF is up by 7 pips (+0.06%) to 1.2735; EUR/CHF is up by 11 pips (+0.10%) to 1.1354; AUD/CHF is up by 6 pips (+0.09%) to .7293; CAD/CHF is up by 8 pips (+0.10%) to .7500, and CHF/JPY is down by 12 pips (+0.10%) to 113.80.
Watch Out For:
- G20 meetings start today
- 7:00 am GMT: Germany’s import prices (0.4% expected and previous)
- 7:00 am GMT: Germany’s retail sales (0.4% expected, 0.1% previous)
- 7:00 am GMT: U.K.’s Nationwide house price index (0.1% expected, 0.0% previous)
- 7:45 am GMT: France’s preliminary CPI (-0.2% expected, 0.1% previous)
- 8:00 am GMT: Switzerland’s KOF economic barometer (99.6 expected, 100.1 previous)
- 9:00 am GMT: Italy’s monthly unemployment rate expected to remain at 10.1%
- 10:00 am GMT: Euro Zone’s CPI flash estimate (y/y) (2.1% expected, 2.2% previous)
- 10:00 am GMT: Euro Zone’s core CPI flash estimate (y/y) (1.1% expected and previous)
- 10:00 am GMT: Italy’s preliminary CPI (-0.3% expected, 0.0% previous)
- 10:00 am GMT: Euro Zone’s unemployment rate (8.0% expected, 8.1% previous)