Global Markets:
- Asian Stock Markets : Nikkei down 1.28%, Shanghai Composite down 0.59%, Hang Seng up 1.25% ASX down 0.51%
- Commodities : Gold at $2406.5 (-0.27%), Silver at $29.21 (-0.44%), Brent Oil at $82.63 (0.37%), WTI Oil at $78.99 (0.21%)
- Rates : US 10-year yield at 4.211, UK 10-year yield at 4.1265, Germany 10-year yield at 2.448
News & Data:
- (CAD) Core Retail Sales m/m -1.3% vs -0.5% expected
- (CAD) Retail Sales m/m -0.8% vs -0.5% expected
Markets Update:
Asia-Pacific markets fell on Monday after U.S. President Joe Biden withdrew from the presidential race, endorsing Vice President Kamala Harris as the Democratic nominee. China’s central bank cut the short-term 7-day reverse repurchase rate to 1.7% from 1.8% and trimmed the one-year and five-year loan prime rates by 10 basis points each, to 3.35% and 3.85%. This move, surprising economists, also included reducing collateral requirements for the medium-term lending facility, currently at 2.5%. A Reuters survey had shown that 64% of respondents expected no changes to the LPR rates, which are benchmarks for corporate loans and mortgages.
Hong Kong’s Hang Seng index rose 1.2% following the PBOC’s announcement, while the mainland Chinese CSI 300 fell 0.72%. The offshore Chinese yuan weakened by 0.16% to 7.2952 against the U.S. dollar. Investors are also assessing the impact of a global IT outage caused by a glitch in a CrowdStrike update, which led to Microsoft Windows operating system crashes and an 11% drop in CrowdStrike’s shares. Microsoft reported that around 8.5 million Windows devices were affected.
This week, investors will focus on GDP data from South Korea and the U.S., and factory activity data from the region. Both countries will release second-quarter advance GDP figures on Thursday. Other key economic data include U.S. and Singapore inflation numbers on Friday and Tuesday, respectively. The Taiwan Weighted Index led regional losses, dropping 2.7%, followed by Japan’s Nikkei 225 and Topix, which fell 1.21% and 1%. South Korea’s Kospi declined by 1.44%, with the small-cap Kosdaq down 2.52%. Australia’s S&P/ASX 200 dropped 0.66%.
On Wall Street, all three major indexes retreated on Friday. The S&P 500 fell 0.71%, the Nasdaq Composite slid 0.81%, and the Dow Jones Industrial Average decreased by 377.49 points, or 0.93%, to 40,287.53.
