Global Markets Update
- U.S. equity markets closed lower on Friday, with the Dow Jones down -0.4%, S&P 500 down -0.5% and NASDAQ declining -0.7%. U.S. personal spending accelerated more than expected in June, increasing +1% MoM, reflecting a ramp up in outlays on services, as incomes rose +0.1%, wages and salaries climbed +0.8% (reflecting both rising pay and an improvement in the labor market) and saving rate fell to a pandemic-low of 9.4%, while personal consumption expenditures price gauge (Fed’s inflation measure) continued to climb, rising +0.5% for a second month.
- Long-dated U.S. treasury yields were lower, with the 2-Yr yield at 0.184% and the 10-Yr yield at 1.222%.
- European markets. European equity markets closed lower on Friday, with the Stoxx Europe 600 down -0.5%, German DAX down -0.6% and U.K. FTSE 100 declining -0.7%. The euro-area exited recession in 2Q21 with GDP expanding +2% qoq (+13.7% yoy), driven by southern European countries (Spain and Italy) with Germany, the region’s largest economy, expanding less than forecast as supply-chain disruptions weighed on key industries such as carmakers. Euro-area unemployment unexpectedly declined in June by -30bps to 7.7%, however, inflation continued to pick up with CPI in July jumping to 2.2%, the fastest since 2018.
- Asian markets. Asian equity markets closed lower on Friday, with the Shanghai Composite down -0.4%, after data revealed China’s economic activity continued to ease in July with official manufacturing PMI falling to 50.4 from 50.9 in June as higher raw material costs, equipment maintenance and extreme weather weighed on business activity, and non-manufacturing PMI, which measures activity in the construction and services sectors, easing to 53.3 from 53.5. The Hang Seng was down -1.3%, KOSPI down -1.2% and Nikkei 225 declined -1.8%.
- WTI oil is trading at US$73.95 a barrel. Iron ore price is at US$190.15 per ton. Spot gold is trading at US$1,814 per oz.
ASX Market Update
- ASX performance. The ASX 200 closed -0.33% lower on Friday, amid inflation concerns with Aus’s PPI rising +2.2% yoy (+0.7% qoq) in 2Q21.
- Origin Energy Ltd (ORG) declined -7.8%, after announcing it expects to recognize non-cash post-tax charges of A$2.247bn in its FY21 accounts.
Today’s trading. In Australia, inflation data is to be published.