Market News & Analysis


Market Brief: Worries Over Impeachment & Trade Tensions Outweigh China PMI

,

  • Caixin released their PMI which shows the sector expanded at its fastest rate since February 2018, with production and new orders also rising faster than in August. Whilst NBS manufacturing PMI released earlier contracted for a fifth consecutive month, it was not as bad as feared. In fact, at 49.8 it was the slowest contraction since moving below 50 and above 49.5 as forecast. Whilst this could be seen as a net positive for global growth concerns, FX markets remained quite unresponsive to the data.
  • NZD is today’s weakest major after business sentiment fell to a near 11.5 year low. Activity declined for a second consecutive month and costs, pricing intensions and inflation expectations are all weaker, according to respondents. And for the first time in 10 years, no sector reported plans to increase staff. NZD/USD found support just above 4-year lows, NZD/CAD hit a 4-year low and AUD/NZD touched a 5-day high.
  • Japan’s retail sales jumped 2%, above 0.9% expected as shoppers rushed to beat the sales tax hike to be implemented tomorrow. Currently at 8% it will be raised to 10%.
  • A global trade barometer by DHL expects a further deceleration in trade.


Data from Refinitiv. Index names may not reflect tradable instruments and not all markets are available in all regions.

  • Mix performances seen on the key Asian stock markets as at today’s Asian mid-session. Market participants now weight the possibility of the U.S. administration to impose restrictions on U.S. capital inflows into China that can escalate the on-going trade tension between U.S. and China. Over the weekend, a U.S Treasury official has been quoted by media that the U.S. still has not plans “at this time” to stop China firms from listing on U.S. stock exchanges.
  • The worst performer so far is the Japan’s Nikkei 225 where it has shed by -0.85% to print a 3-week low of 21690 on the back drop of a weakening manufacturing sector. Preliminary Industrial Production for Aug has declined by -4.7% y/y that has came in far below expectation of -1.8% y/y.
  • China’s official and Caixin Manufacturing PMIs for Sep has improved slightly; (49.8 versus 49.5 in Aug – official) and (51.4 versus 50.4 in Aug - Caixin). No much impact on the markets and the China A50 has inched lower by -0.30% ahead of the week-long China’s National Day Golden Week holiday where the local China stock market will be shut from 01 Oct to 07 Oct 2019.
  • The Hong Kong stock market has managed to shrug off last weekend’s violent crashes seen between protestors and the police force and staged an up move of 0.50%. The main catalyst can be attributed to the positive performance of the mega IPO listing of AB INBev’s Asia Pacific unit (the 2nd largest in the world so far in 2019 after Uber) where it has rallied by close to 6% versus its IPO price of HK$27.



Matt Simpson and Kelvin Wong both contributed to this article

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.