20 Feb 2020

Thursday 20th February: Asian markets mixed; China cuts LPR

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Global Markets:

  • Asian Stock Markets : Nikkei up 0.34%, Shanghai Composite up 1.84%, Hang Seng down 0.34%, ASX up 0.25%
  • Commodities : Gold at $1608.95 (-0.18%), Silver at $18.28 (-0.16%), Brent Oil at $59.28 (+0.27%), WTI Oil at $53.78 (+0.54%)
  • Rates : US 10-year yield at 1.559, UK 10-year yield at 0.603, Germany 10-year yield at -0.417

News & Data:

  • (AUD) Unemployment Rate 5.30% vs 5.20% expected
  • (AUD) Employment Change 13.5K vs 10.0K expected
  • (USD) PPI m/m 0.50% vs 0.10% expected
  • (USD) Core PPI m/m 0.50% vs 0.20% expected
  • (USD) Building Permits 1.55M vs 1.45M expected
  • (CAD) Trimmed CPI y/y 2.10% vs 2.20% expected
  • (CAD) Median CPI y/y 2.20% vs 2.20% expected
  • (CAD) Common CPI y/y 1.80% vs 2.00% expected
  • (CAD) CPI m/m 0.30% vs 0.20% expected
  • (GBP) PPI Input m/m 0.90% vs -0.50% expected
  • (GBP) CPI y/y 1.80% vs 1.60% expected

Markets Update:

Asian stock markets are mixed on Thursday despite easing fears about the coronavirus outbreak and optimism of further stimulus measures by China to support its economy. On Thursday, China cut the one-year loan prime rate or LPR by 10 basis points in order to lower financing costs for businesses. Meanwhile, China’s National Health Commission reported only 394 new confirmed cases related to the coronavirus outbreak as of February 19, sharply lower than the 1,749 new cases reported in the previous day.

Mainland Chinese stocks rose by the afternoon, with the Shanghai composite up about 1.8%. The Shenzhen composite also gained 2.3%. Hong Kong’s Hang Seng index, on the other hand, slipped 0.3%. Shares in Japan rose.

The Nikkei 225 shed earlier gains but remained in positive territory as it traded 0.3% higher, with shares of index heavyweight and conglomerate Softbank Group soaring 3%. Stocks in Australia saw gains as the S&P/ASX 200 rose 0.3%. The moves came as an earlier release showed Australia’s unemployment rate rising on a seasonally adjusted basis in January.

Oil prices added to overnight gains while gold loitered around $1,609 per ounce. Currency markets were still reeling from an overnight plunge in the Japanese yen, which fell even as safe-haven assets such as gold climbed.

Upcoming Events:

  • 09:30 AM GMT – (GBP) Retail Sales m/m
  • 12:30 PM GMT – (EUR) ECB Monetary Policy Meeting Accounts
  • 01:30 PM GMT – (USD) Philly Fed Manufacturing Index
  • 04:00 PM GMT – (USD) Crude Oil Inventories