- Equities in Asia-Pacific markets fail to keep the previous day’s upbeat performance.
- Sino-American tussle, mixed data from Australia and China supersede upbeat sentiment backed by hopes of virus cure.
- A busy day ahead with UK Jobs report, ECB and US Retail Sales occupying front row in the calendar.
Shares in Asia recall bears, though only a few of them, as risk-off sentiment sneaks in during the pre-European session on Thursday. Market players couldn’t cheer the hopes of the coronavirus (COVID-19) cure for long as the US and China re-started jostling. Also weighing on the mood could be mixed statistics from Beijing and Canberra as well as trader’s caution ahead of the key ECB.
China’s second-quarter (Q2) GDP and June month Industrial Production couldn’t outweigh downbeat Retail Sales for the previous month. On the other hand, a rise in the Aussie Unemployment rate, from 7.1% prior to match 7.4%, dimmed the charm of better than forecast and prior readings of Employment Change. Additionally, the surge in the COVID-19 numbers from Victoria and the US also raise the bars for the bulls’ entry.
Talking about the US-China tension, the White House is considering national security checks over the Chinese apps with the New York Times suggesting heavy sanctions on Beijing’s top-tier diplomats to propel the pessimism. On the other hand, the dragon nation remains ready, as always, to retaliate the American moves with harsh measures, per Global Times. It’s worth mentioning that Chinese President Xi Jinping praised the nation’s economic recovery but couldn’t please the bulls.
Elsewhere, Bank of Korea (BOK) held monetary policy unchanged with Governor Lee Ju-yeol defying calls of further easing. Additionally, New Zealand’s Q2 Consumer Price Index (CPI) met downbeat forecasts and increased odds of the RBNZ’s easy money.
Amid all these catalysts, the MSCI index of Asia-Pacific shares outside Japan declines by 1.20%, with Japan’s Nikkei 225 printing 0.70% loss to 22,790, by the press time. Australia’s ASX 200 also follows the broad market sentiment whereas New Zealand’s NZX 50 drops over 1.6% as both the largest customers, namely Australia and China, failed to offer any trade-positive news. Further, Chinese equities bear the burden of fears that the uneven economic recovery may falter despite the People’s Bank of China’s (PBOC) readiness to act.
Looking forward, Indonesia’s IDX bucks the trend with mild gains ahead of the Bank Indonesia meeting while South Korea’s KOSPI fails to cheer the BOK’s upbeat performance. Furthermore, US 10-year Treasury yields and S&P 500 Futures snap the previous two-day winning streak while markets in India remain sluggish.
Considering the heavy economic calendar, starting with British employment figures, global traders will have an active day ahead. The same could offer mild reaction to the geopolitical news unless they’re of extreme importance. It should be noted that the European Central Bank’s (ECB) monetary policy decision will be the key despite no change expectations.
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