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5 Things to Watch This Morning

Published 08/13/2015, 06:29 AM
Updated 08/13/2015, 06:29 AM
© Reuters.  5 Things to Watch This Morning: Yuan, Global stocks rise, Retail sales, Earnings, Greek vote

© Reuters. 5 Things to Watch This Morning: Yuan, Global stocks rise, Retail sales, Earnings, Greek vote

1. PBOC eases fear on yuan

The People's Bank of China reassured markets that it will not continuously devalue the yuan, easing concerns over a full blown currency war that could destabilize the global economy.

The central bank said in a closely-watched press conference earlier Thursday that there was no basis for further depreciation in the yuan, given China's strong economic fundamentals.

China's yuan opened slightly weaker on Thursday, but losses were limited as policymakers stepped up intervention in the market in a bid to stabilize prices.

2. Global stocks higher overnight

Risk-related assets rebounded on Thursday, with global stocks, emerging market currencies and commodities all moving higher after the Chinese central bank reiterated that there was no basis for continued currency depreciation.

Asian equity markets posted strong gains, with China's Shanghai Composite, Japan's Nikkei, Hong Kong's Hang Seng and Australia's S&P/ASX 200 all closing in the green.

In Europe, the EURO STOXX 50, France’s CAC 40 and Germany’s DAX 30 all rallied nearly 2%.

Meanwhile, copper and oil prices bounced back from six-year lows amid improved appetite for growth-linked assets.

3. Investors await retail sales report

The Commerce Department is expected to report at 8:30AM ET that retail sales rose by 0.5% in July, after falling 0.3% in June. Core sales are forecast to gain 0.4%, after dipping 0.1% a month earlier.

Also at 8:30AM, the U.S. is to release reports on initial jobless claims and import prices, while data on business inventories is due at 10:00AM.

Some traders believe that the Federal Reserve could postpone raising interest rates at its September meeting in response to China’s currency devaluation move, as Fed officials are likely to remain concerned over global growth and inflation pressures.

4. Wall Street earning season begins to wind down

Kohl`s (NYSE:KSS), Advanced Auto Parts (NYSE:AAP) and Coty (NYSE:COTY) are due to report quarterly earnings ahead of Thursday's opening bell, while Applied Materials (NASDAQ:AMAT), El Pollo Loco Holdings (NASDAQ:LOCO), Weibo (NASDAQ:WB) and Nordstrom (NYSE:JWN) are due after the bell.

5. Greece prepares for bailout vote

Greece's parliament is set to vote on the country's latest bailout deal later in the day, which will then be sent to euro zone member states for approval on Friday afternoon.

Athens, which narrowly avoided an exit from the euro zone last month, must repay €3.4 billion to the European Central Bank by August 20.

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