🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Market Brief: Treading Water Ahead Of ISM Services PMI

Published 10/03/2019, 02:40 AM
Daily % Candles

FX Brief:

  • Ahead of trade talks, White House advisor Peter Navarro has listed “seven deadly sins” from China; Cyber attacking, IP theft, forced technology transfer, goods trade balance, China state-owned subsidies, FX manipulation and fentanyl shipped to “kill countless Americans”.

    The U.S. are to hit Europe with a 10% tariff on European-made Airbus plan and 25% on French wine, Scotch and Irish Whiskey and continental cheese.

  • Fed Williams (NYSE:WMB) see’s monetary policy as “in the right place”, although the outlook for the economy is mixed. On tariffs he sees risks to the economy as relatively modest.
  • Australian exports fell -3% in September and weighed on their surplus. Yet it still touched a marginal 2-day high following yesterday’s bullish doji at multi-year lows.
  • Minor ranges overall, AUD is the strongest major, elsewhere majors remain in low-ranging holding patterns.
  • Asian Cash Indices % Change

    Equity Brief:

    • Asian stock markets have continued to see further downside, taking the cue from another bloodbath seen overnight in the U.S. stock markets. In additional, the U.S. benchmark stock index, S&P 500 has seen its first back to back drop of more than 1% in 2019. South Korea’s KOSPI 200 has managed to “escape” the bleeding as its stock exchange is closed today for a public holiday.

  • One of the worst performers as at today’s Asian mid-session is Japan’s Nikkei 225. It shed 2.20% in line with a stronger JPY where the USD/JPY hit a 3-day low of 107.00. Also, latest data on Japan’s services sector for Sep has indicated a slow-down in growth over Aug where the Jibun Bank Japan Services PMI dropped to 52.8 from 53.3 seen in August.
  • The slowdown in growth seen in Japan’s services sector, the main driving force so far in order to maintain a positive economic growth to offset the negative impact from a 9-month export slump is a concern to market participants. The government has just imposed an increase in sales tax to 10% from 8% that came into effect on 01 Oct which can lead to a slowdown in future domestic consumption where the services sector is dependent on.
  • Australia’s ASX 200 also sees further downside as it tumbled by -2.23% to print a 4-week low of 6475 led by technology and energy stocks that has declined by -2.50% and -3.02% respectively.
  • Adding salt to the on-going negative sentiment, the U.S. administration has decided to hike tariffs on European produces; 10% tariffs on European aircrafts and 25% duties on other goods such wines and cheese as punishment for illegal EU aircraft subsides.
  • After a 2-day decline of 3.5% in the S&P 500 to print a low of 2875 seen yesterday, the S&P 500 E-Mini futures has traded sideways in a tight range of 9 points so far in today’s Asian session.
  • Up Next

    • Final PMI reads for France, Germany and the Eurozone are released early in the European session. Major revisions aren’t expected but if they are lowered, it simply feeds into the negative sentiment regarding global growth. Keep Euro crosses and DAX on your radar.

    • However, the highlight could be ISM’s non-manufacturing PMI for the U.S. Given we saw ISM manufacturing tank to a 10-year low this week, Non-manufacturing (NM PMI) could receive extra scrutiny. Although NM PMI has remained expansive since the GFC, a slower rate of expansion points towards a broader slowdown and could exacerbate risk-ff sentiment if it slows enough later today. Therefor a weak print could weigh on USD and U.S. indices.
    Economic Calendar

    Original Post

    Latest comments

    Loading next article…
    Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
    Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
    Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
    It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
    Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
    © 2007-2024 - Fusion Media Limited. All Rights Reserved.