Global Markets Update
- U.S. equity markets closed mostly lower overnight, with the Dow Jones down -0.3%, S&P 500 down -0.2% and NASDAQ gaining +0.1%. U.S. manufacturing expanded at a softer, yet still solid pace in July with ISM’s gauge of factory activity easing for a second month to 59.5 from June’s 60.6, as producers grappled with persistent bottlenecks and input shortages which saw order backlogs edging up to an elevated level.
- Long-dated U.S. treasury yields were lower, with the 2-Yr yield at 0.172% and the 10-Yr yield at 1.174%.
- European markets. European equity markets closed higher overnight, with the Stoxx Europe 600 up +0.6%, German DAX up +0.2% and U.K. FTSE 100 gaining +0.7%. Euro-area factory activity continued to accelerate in July (though declining from June’s all time high), with manufacturing PMI coming in at 62.8 with new orders jumping and fueling a considerable increase in backlogs of work, however, widespread shortages of materials and poor transport availability produced record gains in input costs and selling prices.
- Asian markets. Asian equity markets closed higher overnight, with the Shanghai Composite up +2.0%, amid expectations of increased support for the economy with Politburo meeting indicating that authorities will likely take more steps to help struggling small businesses, boost fiscal spending and possibly reduce the reserve requirement ratio for banks again. The Hang Seng was up +1.1%, as Tech stocks rebounded after China’s market regulator called for more cooperation with the U.S. on initial public offerings. KOSPI was up +0.6% and Nikkei 225 gained +1.8%.
- WTI oil declined -3.4% and is trading at US$71.43 a barrel, after tensions with Iran flared up with the U.S., Israel and the U.K. vowing to respond to the drone attack on an Israeli-linked tanker. Iron ore price is at US$178.63 per ton. Spot gold is trading at US$1,814 per oz.
ASX Market Update
- ASX performance. The ASX 200 closed +1.34% higher yesterday, led by gains in Banks (+2.05%) stocks.
- Afterpay Ltd (APT) surged +18.8%, after receiving a US$29bn (~A$126 per share) takeover offer from U.S. based firm Square Inc.
- Today’s trading. In Australia, RBA’s cash rate target and data on retail sales is to be published.