Market Talk - Tuesday, Aug. 31

ASIA:

China’s businesses and the broader economy came under increasing pressure in August as factory activity expanded at a slower pace while the services sector slumped into contraction, raising the likelihood of more near-term policy support to boost growth. The world’s second-biggest economy staged an impressive recovery from a coronavirus-battered slump, but momentum has weakened recently due to domestic COVID-19 outbreaks, high raw material prices, slowing exports, tighter measures to tame hot property prices, and a campaign to reduce carbon emissions. The official manufacturing Purchasing Manager’s Index (PMI) fell to 50.1 in August from 50.4 in July, data from the National Bureau of Statistics (NBS) showed on Tuesday, holding just above the 50-point mark that separates growth from contraction.

The Bank of Japan (BOJ) won’t be able to promote “green” activities in a major way without the Japanese government coming up with credible strategies to achieve the net zero target, former BOJ policy board member Sayuri Shirai said. Lending to banks alone will not be enough to promote green activity, even if the maturity of these loans can be renewed unlimitedly, Shirai told the Reuters Global Markets Forum (GMF) on Monday. Former Reserve Bank of India governor Raghuram Rajan told GMF last week the onus of promoting sustainable investments should lie with governments and not central banks.

The major Asian stock markets had a green day today:

  • NIKKEI 225 increased 300.25 points or 1.08% to 28,089.54
  • Shanghai increased 15.79 points or 0.45% to 3,543.94
  • Hang Seng increased 339.45 or 1.33% to 25,878.99
  • ASX 200 increased 30.40 points or 0.41% to 7,534.90
  • Kospi increased 55.08 points or 1.75% to 3,199.27
  • SENSEX increased 662.63 points or 1.16% to 57,552.39
  • Nifty50 increased 201.15 points or 1.19% to 17,132.20

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00152 or 0.21% to 0.73079
  • NZDUSD increased 0.00455 or 0.65% to 0.70429
  • USDJPY increased 0.12 or 0.11% to 110.07
  • USDCNY decreased 0.00957 or -0.15% to 6.45518

Precious Metals:

  • Gold decreased 2.11 USD/t oz. or -0.12% to 1,808.06
  • Silver decreased 0.174 USD/t. oz or -0.72% to 23.886

Some economic news from last night:

China:

Chinese Composite PMI (Aug) decreased from 52.4 to 48.9

Manufacturing PMI (Aug) decreased from 50.4 to 50.1

Non-Manufacturing PMI (Aug) decreased from 53.3 to 47.5

Japan:

Jobs/applications ratio (Jul) increased from 1.13 to 1.15

Unemployment Rate (Jul) decreased from 2.9% to 2.8%

Industrial Production (MoM) (Jul) decreased from 6.5% to -1.5%

Industrial Production forecast 1m ahead (MoM) (Aug) increased from -1.1% to 3.4%

Industrial Production forecast 2m ahead (MoM) (Sep) decreased from 1.7% to 1.0%

South Korea:

Industrial Production (YoY) (Jul) decreased from 11.5% to 7.9%

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