Daily Update 2nd September, 2021

Global Markets Update

U.S. equity markets closed mixed overnight, with the Dow Jones down -0.1%, S&P 500 flat and NASDAQ closing +0.3% higher, as investors turned to defensive stocks after economic data suggested a slowdown in the labor-market recovery, with U.S. companies adding fewer jobs than expected in August with businesses’ payrolls increasing by 374,000, reflecting persistent hiring challenges. U.S. manufacturing expanded at a stronger-than-expected pace in August, reflecting faster orders and production growth as well as rising backlogs consistent with global supply chain challenges, and index of prices paid for materials eased to the lowest since December but still remained well above pre-pandemic levels.

Long-dated U.S. treasury yields were mixed, with the 2-Yr yield higher at 0.209% and the 10-Yr yield lower at 1.295%.

European markets. European equity markets closed mostly higher overnight as economic rebound hopes were fuelled by news that the EU had fully vaccinated 70% of its adult population. The Stoxx Europe 600 was up +0.5%, U.K. FTSE 100 up +0.4% and German DAX declined -0.1%.

Asian markets. Asian equity markets closed higher overnight, with the Hang Seng up +0.6%, Shanghai Composite up +0.7%, Nikkei 225 gaining +1.3% and KOSPI closing +0.2% higher. China’s factory activity contracted for the first time since April 2020 in August with the Caixin Manufacturing PMI dropping to 49.2, as fresh virus outbreaks disrupted production. Japanese firms boosted investment for a second straight quarter and by the most since the pandemic hit in 2Q21, with capex increasing +5.3% yoy and capex (excluding software) gaining +3.6% yoy.

WTI oil is trading at US$68.25 a barrel. Iron ore price is at US$153.14 per ton. Spot gold is trading at US$1,814 per oz.

ASX Market Update

ASX performance. The ASX 200 closed -0.10% lower yesterday. Australia’s economy expanded faster than expected in 2Q21 with GDP increasing +0.7% qoq (+9.6% yoy) as strong household and government spending outweighed a drop in export volumes.

Mesoblast Ltd (MSB) declined -5.7%, after facing a new hurdle with the US medicines regulator asking the Company to run another trial of its COVID-19 treatment before it could apply for emergency approvals.