Asia stocks muted amid rate caution; China dips as tech reverses course
THE TAKEAWAY
There are various explanations for why markets are lower today despite some positive data out of the US and Japan. In the US, U. of Michigan Consumer Confidence (JUL F) came in at 85.1, above 84.0 Bloomberg News survey expectations. In Japan, the Consumer Price Index (JUN) came in at +0.2% y/y, above the +0.1% Bloomberg News survey expectations. One plausible explanation is the suggestion that the Fed will change its forward guidance via an article by WSJ reporter Jon Hilsenrath.
Equity markets are meaningfully lower with the Nikkei taking a plunge: S&P -0.54%; Euro Stoxx +0.14%; FTSE -0.47%; Nikkei -2.97%; Hang Seng +0.31% at the time of writing.
In commodities, crude oil is weaker and base metals continue to get hammered: WTI -0.79%; Brent -0.65%; LME Copper -0.57%; COMEX Copper -2.57%; Shanghai Copper -0.32% at the time of writing.Amidst all these declines, bond markets are relatively still.
The yields on most of the major 10-YR. government bonds are flat in trading today.
AUD/USD" width="625" height="292">
The AUD/USD is lower by -0.08% at the time of writing. The pair is attempted to run up to $0.9300 during London Open but was unable to sustain this run and has since traded lower.
GBP/USD" width="628" height="282">
The GBP/USD is lower by -0.16% at the time of writing. The cable clearly moved lower near New York Open and is slightly rebounding into London Close.
EUR/USD" width="630" height="282">
The EUR/USD is marginally lower by -0.12% at the time of writing. After a failed run at $1.3300 near London Open, the pair continued to decline thereafter.
USD/JPY" width="621" height="285">
The USD/JPY is the most volatile pair today, momentarily dipping below ¥98.00 late in the London session. The pair is net -1.06% lower, weighing the Dollar Index lower. One explanation of USD/JPY weakness despite good CPI numbers is that the positive inflation shows "Abenomics" is working, dampening the need for further BoJ easing.
--- by Kevin Jin, DailyFX Research
Charts Created using Marketscope – prepared by Kevin Jin
- US University of Michigan Consumer Confidence comes in better than expected
- USD is broadly weaker
- USDJPY plummets to ¥98.20 despite encouraging inflation figures
There are various explanations for why markets are lower today despite some positive data out of the US and Japan. In the US, U. of Michigan Consumer Confidence (JUL F) came in at 85.1, above 84.0 Bloomberg News survey expectations. In Japan, the Consumer Price Index (JUN) came in at +0.2% y/y, above the +0.1% Bloomberg News survey expectations. One plausible explanation is the suggestion that the Fed will change its forward guidance via an article by WSJ reporter Jon Hilsenrath.
Equity markets are meaningfully lower with the Nikkei taking a plunge: S&P -0.54%; Euro Stoxx +0.14%; FTSE -0.47%; Nikkei -2.97%; Hang Seng +0.31% at the time of writing.
In commodities, crude oil is weaker and base metals continue to get hammered: WTI -0.79%; Brent -0.65%; LME Copper -0.57%; COMEX Copper -2.57%; Shanghai Copper -0.32% at the time of writing.Amidst all these declines, bond markets are relatively still.
The yields on most of the major 10-YR. government bonds are flat in trading today.
AUD/USD" width="625" height="292">The AUD/USD is lower by -0.08% at the time of writing. The pair is attempted to run up to $0.9300 during London Open but was unable to sustain this run and has since traded lower.
GBP/USD" width="628" height="282">The GBP/USD is lower by -0.16% at the time of writing. The cable clearly moved lower near New York Open and is slightly rebounding into London Close.
EUR/USD" width="630" height="282">The EUR/USD is marginally lower by -0.12% at the time of writing. After a failed run at $1.3300 near London Open, the pair continued to decline thereafter.
USD/JPY" width="621" height="285">The USD/JPY is the most volatile pair today, momentarily dipping below ¥98.00 late in the London session. The pair is net -1.06% lower, weighing the Dollar Index lower. One explanation of USD/JPY weakness despite good CPI numbers is that the positive inflation shows "Abenomics" is working, dampening the need for further BoJ easing.
--- by Kevin Jin, DailyFX Research
Charts Created using Marketscope – prepared by Kevin Jin