Sleepy Overnight Session Interrupted By Chinese Market Turmoil

"I'm still bullish on copper. The property backdrop is still good; China economy and industrial production numbers are still good. Orders are coming through from state grid," said analyst Dan Morgan at UBS in Sydney.


In rates, the 10Y held steady at 2.31%, after dropping as much as 2.279% on Friday as the dollar inched 0.1% higher versus the yen to 112.635 yen. Eurozone govt bonds also barely budged, biding their time ahead of this week's European Central Bank meeting for the latest signals on how the central bank plans to scale back its ultra-loose monetary policy. The Bank of Japan too is expected to keep its ultra accommodative policy unchanged when it meets on Wednesday and Thursday. Germany's benchmark 10-year bond yield was at 0.52 percent - down from 18-month highs of 0.58 percent hit a week ago.


Today focus will also shift to earnings season, which will ramp up with the likes of Microsoft Corp. and Unilever set to report.


Top overnight news



  • Eurozone Jun. F CPI unrevised y/y: 1.3%; Core CPI unrevised 1.1%

  • U.K. Chancellor Hammond: transitional period on Brexit deal is likely to be “couple of years,” rather than “couple of months

  • Italian Finance Minister: Italy has exited the tunnel of crisis; government will soon revise growth estimates upward

  • China 2Q GDP 6.9% vs 6.8% est; Jun. Retail Sales 11.0% vs 10.6% est; Industrial Output 7.6% vs 6.5% est.

  • China weekend meeting on finance founds new panel, boosts PBOC

  • Turkish senior adviser: army is preparing for action against Kurdish-run region of Afrin on Syrian border; military buildup on the border is “serious"

  • China’s Growth Beats Amid Reforms; Trump’s Approval Rating Slumps; U.A.E. Orchestrated Qatar Attacks

  • China’s economy grew faster than expected in the second quarter, putting the nation on track to meet its growth target this year and giving backing to officials in their campaign to corral oncoming financial risk

  • President Donald Trump is planning to shake up his legal team and is also evaluating options for his communications shop as the FBI and congressional investigations into his campaign’s possible ties to Russia heat up

  • Senate Republicans anxiously awaiting a key analysis of their revised health bill have more time to wait, and debate on the controversial measure that had been expected this week will also be delayed following a medical scare involving one of its potential backers

  • Green Courte Partners, a private equity and real estate investment firm, is considering a sale of parking operator The Parking Spot

  • Amid a stalled turnaround, General Cable Corp. said it’s hired investment bank JPMorgan Chase & Co. to pursue a potential sale of the company

  • The European Central Bank is on track to unwind its stimulus next year but it’s likely to drag out the process, economists say

  • China plans to punish billionaire Wang Jianlin’s Dalian Wanda Group Co. for breaching the nation’s restrictions on overseas investments by cutting off funding and denying the conglomerate with necessary regulatory approvals


Market Snapshot



  • S&P 500 futures up 0.1% at 2,458.50

  • STOXX Europe 600 down 0.1% to 386.31

  • U.S. Dollar Index up 0.1% to 95.27

  • MXAP up 0.2% to 157.74

  • MXAPJ up 0.3% to 519.97

  • Nikkei up 0.09% to 20,118.86

  • Topix up 0.4% to 1,625.48

  • Hang Seng Index up 0.3% to 26,470.58

  • Shanghai Composite down 1.4% to 3,176.47

  • Sensex up 0.2% to 32,084.90

  • Australia S&P/ASX 200 down 0.2% to 5,755.47

  • Kospi up 0.4% to 2,425.10

  • German 10Y yield fell 1.2 bps to 0.585%

  • Euro down 0.2% to 1.1449 per US$

  • Brent Futures little changed at $48.90/bbl

  • Italian 10Y yield fell 4.1 bps to 1.994%

  • Spanish 10Y yield fell 2.9 bps to 1.622%

  • Gold spot up 0.1% to $1,230.30


Asia equity markets somewhat recovered from the early volatility in China to approach the close mostly higher after Friday's gains on Wall St. where the S&P 500 and DJIA printed fresh record highs, while better than expected Chinese data also provided support. The Asia-Pac region was spooked in early trade as the ChiNext board fell as much as 5% after a profit warning from its largest weighted stock Leshi which expects a net loss for H1. This led to similar declines in the Shenzhen Comp. (-1.7%) while the Shanghai Comp. (-0.1%) fell over 2% before better than expected GDP, Industrial Production and Retail Sales data provided much-needed relief. Finally, ASX 200 (-0.1%) was restricted by weakness in telecoms and financials, while Hang Seng (+0.6%) benefited from a firm liquidity injection by the PBoC, and Japanese markets were shut for Ocean Day holiday.


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