Trading Tuesday

Market Data

Local

Global

*Data as of 4pm WAT

Market News

Local

Global

Weekly Investment Watchlist

Market Commentary

Asia and Australia:

• Asian equities ended Tuesday mixed. Greater China markets experienced another volatile day, and all main benchmarks closed lower after PBOC’s action and weak July economic data.

• The PBOC surprised with a 15 basis point cut to the 1-year Medium-term Lending Facility (MLF) rate, bringing it to 2.50%. The 7-day reverse repo rate was also lowered by 10 basis points to 1.8%.

• China’s industrial production rose 3.7% YoY in July, lower than both consensus and the previous month. Weakness in the car and PC sectors was notable.

• China’s retail sales experienced the biggest miss, with growth slowing to 2.5% from 3.1% (lowest year-to-date) against expectations of a pickup to 4.5%.

• China’s state council and Ministry of finance were considering a cut to stamp duty on stock trades, a move aimed at reviving the stock market.

• Japan’s Q2 GDP surpassed expectations, expanding 6.0% QoQ annualized, double the consensus forecast of 2.9%, following 3.7% growth in the previous quarter.

• The Reserve Bank of New Zealand (RBNZ) was expected to leave the Official Cash Rate (OCR) unchanged at 5.50% in its upcoming policy meeting on August 16.

Europe, Middle East, Africa:

• European equity markets were under pressure.

• UK jobless claims increased, but wage growth accelerated to a new high. This situation doesn’t bode well for inflation, as sticky wage inflation has been a concern for core inflation and may exert pressure on the Bank of England (BoE) to continue hiking rates.

• On the other hand, UK food price inflation dropped sharply by 2.2%, indicating a potential moderation in headline inflation.

• German ZEW sentiment showed a slight improvement in August at -12.3, surpassing the consensus of -14.7 and the previous -14.75.

• The Central Bank of Russia hiked its key rate by 3.5% to 12% at an emergency meeting, aiming to address recent rouble weakness and maintain stability.

• European governments were increasingly imposing windfall taxes on profit-making businesses.

• Saudi Arabia and UAE increased purchases of Nvidia chips crucial for developing AI software.

The Americas:

• Tesla introduced two lower-spec versions of its less popular Model S and X electric vehicles in North America.

• Bank of America (BofA) predicted that US consumers would be more resilient than investors think, with spending expected to rise in 2023 and 2024.

• Argentina’s central bank devalued the peso and raised rates following a surprise election win by a far-right candidate.

• US hedge funds reduced exposure to Chinese stocks in Q2, resulting in exposure well below five-year averages by the end of July.

• Hollywood studios offered writers a new deal to end a strike, including pay increases, data sharing, and assurances related to artificial intelligence (AI).

The Week Ahead:

• Monday:

• Tuesday:

  • Industrial Production (China)

  • Retail Sales (US)

• Wednesday:

  • Consumer Price Index (UK)

  • Gross Domestic Product (EA)

  • Building Permits (US)

  • Industrial Production (US)

  • FOMC Minutes (US)

• Thursday:

  • Initial Jobless Claims (US)

• Friday:

  • Retail Sales (UK)

  • Harmonized Index of Consumer Prices (EA)

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Disclaimer: The information contained in this report is intended for informational purposes only and should not be considered as investment advice. The information is obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed.