Market Brief: Chinese Exports Fall As Trade War continues To Bite

Market Brief: Chinese Exports Fall As Trade War continues To Bite

  • Asian stock markets have started the week on a firm footing on the backdrop of more stimulus hopes from developed nations central banks.
  • Revised Q2 Japan GDP data has indicated a less rosy growth outlook for Capex spending where it has been revised down to 0.2% q/q from a preliminary estimate of 1.5% q/q. The Capex downgrade may “force” Japan central bank, BOJ to implement more easing policies in the upcoming monetary policy meeting next week on 19 Sep.
  • The best performer as at today’s Asian mid-session is the Korea’s Kospi 200 where it has rallied by 0.58% supported by major semiconductor stocks on the optimistic hope of a U.S.-China trade deal; Samsung Electronics and SK Hynix has risen by 1.3% and 3.2% respectively.
  • Hong Kong’s Hang Seng Index has slipped slightly to -0.12% due to violent protests seen over the weekend despite the withdrawal of the controversial China extradition bill as announced by Hong Kong’s Chief Executive on last Wed. Protesters have deemed the withdrawal of the bill as “too little too late”.
  • The S&P 500 E-min futures has continued to build on last week’s gains as it inched higher by 0.20% to print a current intraday high of 2989 in today’s Asian session.

Up Next

  • The UK parliamentary vote on Brexit will be the highlight of the session and likely the bigger market driver, over economic data. The government are to once again ask MPs to agree to a snap election, although expectations are they’ll be defeated. Boris Johnson is also set to meet Irish PM Leo Varadkar.Germany’s trade data for Jul where exports are expected to decline by -0.5% m/m from -0.1%m/m seen in Jun. The trade balance surplus is also expected to shrink to EUR17.5 billion from EUR18.1 billion.
  • UK data makes up for the baulk of economic data today, with expectations mostly pointing towards the soft side. Manufacturing has contracted for 3-month and down -1.4% YoY, although this has been weighed down by the -4.4% print in April.  
  • Monthly GDP failed to grow in July at 0%, although this is expected to lift to a mere 0.1% in August. Although, with economic data continuing to fall short of expectations, this leaves potential for a negative print today.

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