News / Analysis
Finance Update – Leaders Under ThreatAugust 17, 2020
Asian equities begin the week in the green, save the Nikkei (-0.59%) and the ASX (-0.63%). The Shanghai Dow Jones leads with a 2.73% gain.
Japanese data for Q2 disappointed, with GDP contracting by a record pace of 7.8% – 2 ticks more than expected, and industrial production in June contracting by 18.2% YoY – a full per cent worse than in May. All this has totally erased the government Abenomics gains, as the Japanese PM is hospitalised for routine checkups.
The Yuan relented overnight in its upswing after retail sales in July contracted by another pecent with industrial production failing to improve beyond June’s 4.8%. However, on Sunday, the National Intellectual Property Administration issued CanSino Biologics a patent for its COVID-19 vaccination candidate.
The US Department of Homeland Security’s Customs and Border Protection agency has issued a notice requiring all Hong Kong goods to be marked ‘Made in China” and thus subject to all the punitive measures thereof.
And in New Zealand, the dollar is down a quarter per cent after PM Ardern announced the postponement of national elections following a COVID flareup.
European indices ended in the red across the board last week led by the AEX’s -1.6%.
CPIs across the region remained stable, as did preliminary GDP readings for Q2 with unemployment increasing by 2.9% YoY – a full per cent worse than expected; but the zone’s trade surplus grew in June to €21.2 bn.
In the UK, the Rightmove portal delivered its highest post-lockdown home sales index – 4.6% growth YoY in August. And British Trade Secretary Liz Truss has protested against US tariffs on Scotch whisky to the tune of 25%.
Also, Hong Kong governor Carrie Lam has reportedly resigned as an honorary fellow at Cambridge University, which has questioned her commitment to human rights and freedom of expression, according to a Reuters report this morning. Lam is a graduate of Hong Kong University and a former British civil servant. She also studied at Cambridge, where she met her future husband.
US benchmarks on Friday straddled the 0 mark, the Nasdaq down 0.21% and the Dow up 0.12%.
The dollar added some traction on Friday as most data came in better than expected. Continuing Jobless Claims fell more than expected to 15.486 mn, the initial figure fell below the million mark for the 1st time since March, and the Michigan Consumer Sentiment Index increased marginally to 72.8.
On the other hand, retail sales slashed growth to 1.2& in July from 8.4% the month before – both attributed to the $600 weekly unemployment benefit programme; the import/export price indexes continued below par, and industrial production halved its increase to 3% MoM – all prompting to dollar to return its gains by session’s end.
Oil on Friday dipped momentarily before the Baker Hughes company delivered a 172-rig count – another 4-rig contraction in active oil drills in the US. Additional backwind was provided overnight by China’s booking of 20 million barrels of US crude for delivery in August and September.
And gold continues consolidating towards 1950, failing to regain its pre-Monday foothold well above the 2K mark.
Meanwhile, China’s Commerce Ministry is expanding the central bank’s digital yuan trials to Beijing, Guangzhou, Shenzhen, Hong Kong and Macau, and the Banque de France has announced the commencement of a central bank digital currency alongside Societe Generale, HSBC and 6 other large banks.
Google (-0.79%) this morning went public with its criticism of Australia’s proposed new antitrust laws, which – among others – would “allow Australian news businesses to negotiate for fair payment for their journalists’ work that is included on Google services”, according to Rod Sims, the head of the Australian Competition and Consumer Commission – Reuters reports.
Also, IBM (+0.19%) this morning announced the release of its Power10 processors for data centres, produced with Samsung’s (-1.19%) 7-nanometer chip technology.
And Tesco has announced a free grocery delivery service to compete with Amazon’s (-0.41%) incursion into the UK online grocery market, this after this morning’s announcement of a German probe into Amazon’s abuse of its dominant market position.
Proctor & Gamble, Hormel Foods, NRG Energy, Kinder Morgan and Alliant Energy will be paying dividends, today.
|12:30 PM GMT||US||Empire State Manufacturing Index. NAHB Housing Market Index at 2 PM.|
|12:30 PM GMT||Canada||Investment Indices|
|ND||NZ||House Price Index & Business PSI|
|01:30 AM GMT (+1)||Australia||RBA Meeting Minutes|