Asian equities trades mostly lower after Wall Street closed mostly in the red as weakness in crude and a resurface of concerns regarding China dampened sentiment. Only the ASX 200 managed a positive close, gaining 0.78% despite lower than expected Home Sales m/m which printed -3.9% vs -2.7%. The Nikkei 225 posted losses of 0.84% and the Shanghai comp. continued to price in yesterday’s poor trade data and finished down 2.4%.
Data out of the region is expected to keep markets well entertained with important data being released from New Zealand and China:
- Official Cash Rate exp. 2.5%
- RBNZ Rate Statement
- RBNZ Monetary Policy Statement
- RBNZ Press Conference
- RBNZ Gov Wheeler Speaks
- CPI y/y exp. 1.8%
- PPI y/y exp. -4.9%
Kiwi traders will be kept on their toes with various statement and announcements regarding the current and future outlook for the New Zealand economy. A more hawkish tone will see the NZD gain across the board. Whereas a more dovish tone will see the NZD suffer losses as the economy continues to struggle I the recent global down turn.
All eyes will be on the Chinese figures after recent trade data dampened global sentiment. Further failure to meet expectations will see risk off sentiment continue, with equities and commodities falling as the USD and JPY gain traction.
Risk off sentiment due to poor Chines trade data weighed on Wall Street with all indexes finishing down, the S&P 500 finished down 1.12%, the DJIA finished down 0.65% and the Nasdaq posted losses of 0.88%. USD bulls enjoyed the risk off sentiment and strengthened across the board as markets wait more data for direction.
BOE`s Weale`s comment that the next rate change would be a hike had no bearing on markets as the GBP lost some ground in yesterday’s trade, which was further solidified by reports citing the Queen as backing a Brexit. Social General commented that a Brexit would result in the EURUSD falling to parity and the GBPUSD falling below 1.3000. Data out of the UK today comes in the form of the Manufacturing Production m/m expected a 0.2%. A better that expected number would see GBP bulls rejoice as they look to retest recent highs with the help of the data.
The Canadian dollar has enjoyed some positive gains in recent trade, backed by increasing oil prices but has faltered lately as shaky global data and a persistence oversupply of crude oil has seen crude fall and CAD bears resurface as a consequence. Today’s Overnight Rate release has the rate staying at 0.5% which markets have priced in. The one to watch will be the Rate statement, which will give the banks view on current and future economic conditions which if hawkish will see the Cad make further gains.