Market Overview

Mixed Macro Data Worldwide: 4 Things The Global Markets Are Talking About Today

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Euro stocks have found some traction after a mixed performance overnight in Asia, as investors remain upbeat over the tentative trade truce between the U.S and the E.U.

President Trump and European Commission President Juncker agreed, in principle, not to impose new tariffs while the two economies sorted out their differences. The truce comes as Sino-U.S trade relations remain on edge.

Aside from corporate balance sheets, capital markets remains focused on trade and central bank policy – BoJ (July 30), Fed (Aug. 1) & BoE (Aug. 2).

The President had been optimistic on Friday's GDP print, telling anyone who would listen he expected a 4.8 percent headline. The actual number came in at 4.1 percent growth.

This morning's U.S data may provide support for the Fed's tightening path, while in Japan, reports suggest the BoJ is debating ways to reduce the side effects of their yield-curve control policy.

Note: The ECB indicated yesterday that it will stick to its plan to end bond purchases and pledged to keep interest rates unchanged "at least through the summer of 2019."

1. Stocks Mixed Results

In Japan, equities closed higher overnight, taking solace from signs of reconciliation between the U.S and Europe over trade issues. The benchmark Nikkei share average hit a one-week closing high and ended the week 0.56 percent firmer. The broader Topix ended 0.57 percent higher.

Down-under, the Aussie's stock benchmark topped early July's best in notching another eleven-year closing high — the S&P/ASX 200 rose 0.9 percent as BHP Billiton rose 2.3 percent. In South Korea, the Kospi cooled following Thursday's outperformance, but still rose further, allowing the index to narrowly avoid a sixth-decline in seven-weeks. It rose 0.3 percent, both today and on the week.

In Hong Kong, stocks ended flat as expectations of more stimuli from Beijing offset worries over a China economic slowdown. The Hang Seng index rose 0.1 percent, while the China Enterprises Index gained 0.2 percent.

In China, bourses ended down overnight, as investors remain cautious amid concerns over the Sino-U.S trade friction. The blue-chip CSI300 index ended 0.4 percent down, while the Shanghai Composite Index closed 0.3 percent lower.

In Europe, regional bourses are pushing higher, continuing the positive momentum, with largely positive earnings helping fuel sentiment.

2. Oil Markets Ease

Oil prices are a tad lower in quiet trading after three-days of gains, but took support from Saudi Arabia halting crude transport through a key shipping lane, falling U.S stock levels and easing global trade tensions.

Brent futures are down 5c at $74.49 a barrel — it's heading for a near 2 percent gain this week, the first weekly increase in four. U.S West Texas Intermediate (WTI) futures are 5c lower at $69.56, after rising nearly 0.5 percent on Thursday. The contract is heading for a 1.3 percent weekly loss, a fourth-week of declines.

On Thursday, Saudi Arabia said that it was "temporarily halting" all oil shipments through the strategic Red Sea shipping lane of Bab al-Mandeb after an attack on two oil tankers by Yemen's Iran-aligned Houthi movement.

Note: An estimated 4.8 million bpd of crude oil and refined petroleum products flow through this waterway towards Europe, the U.S and Asia.

This week's EIA report showed that crude inventories fell 6.1 million barrels in the week to July 20, compared with a market expectation for a decrease of -2.3M barrels.

Ahead of the U.S open, gold prices have edged a tad higher overnight as the dollar slipped against G10 pairs ahead of U.S GDP data that could shed light on the pace of rate hikes stateside. Spot gold is up 0.1 percent at $1,223.96 an ounce. U.S gold futures, for August delivery are 0.2 percent lower at $1,223.20 an ounce.

Note: The "yellow" metal is on track for its third consecutive weekly decline.

3. Euro Yields Barely Move

Eurozone government bond yields have barely moved in this week's post-ECB meeting environment, even as the central bank stopped short of providing details on reinvestments.

Stateside, U.S bond prices are a tad weaker, falling after the ECB said it would hold its benchmark interest rate steady and the U.S. reported progress on a revamped Nafta agreement.

The yield on the benchmark 10-year Treasury note is at 2.975 percent, up from 2.936 percent Thursday.

Yesterday, Draghi confirmed the ECB's plans to gradually phase out easy-money policies, but signalled the central bank would likely hold interest rates steady until the end of next summer. The move continues to highlight a widening policy divergence with the Fed.

4. French Consumer Spending Sluggish

Data this morning showed that French consumer spending was lethargic last month, with household expenditure staying "virtually flat," according to statistics agency Insee.

Digging deeper, consumer spending rose 0.1 percent on month in June, well below market expectations for a rise of 0.5 percent.

Spending was up 0.3 percent on year – the agency also revised May's figure for household expenditure on goods to 1.0 percent from 0.9. percent Consumption in food and energy was stable in June, with a slight rise in engineered goods and a slowdown in durables.

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The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: News Eurozone Commodities Forex Treasuries Global Econ #s Markets

 

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