25 Oct 2013
Morning outlook: Asian markets weighed by China concerns and earnings misses
FXstreet.com (London) - Yesterday and the overnight Asian session saw a a tale of two markets, as US equities continued to rally despite weakening US fundamentals, while Asian markets added to their weekly declines on disappointing earnings reports and continuing fears over Chinese banking liquidity. This was despite consensus expectation-beating China manufacturing PMIs.
The S&P and the Dow added 0.62 percent and 0.62 percent respectively, with 10-year US Tresuries continuing to fall to 2.511 percent.
Despite attempts by Chinese officials to reassure markets, the bank funding fears continued to weigh on the Asia session. The China 7-day repo opened at 4.8 percent, up from 4.79 percent on the close, but the People’s Bank of China signalled that it would resume reverse-repo transactions if money market rates became elevated.
The New Zealand dollar had already come under pressure as risk-off sentiment drove selling of higher-yielding currencies, but Reserve Bank of New Zealand governor Graeme Wheeler added to Kiwi dollar pressure by commenting that mortgage curbs were beginning to work, reducing the need for further rate hikes in the near term.
NZD/USD is down 0.39 percent to USD0.8314.
This morning, sterling watchers will be looking to the UK Office for National Statistics third quarter GDP figures. Despite steady growth of late, recent soft construction numbers could signal a risk to the 0.9 percent consensus expectations.
Durable goods figures are due today in the US with are expected to be up 0.3 percent for the headline rate and 0.5 percent ex-transportation.
Wholesale inventories are expected to be up 0.3 percent month-on-month. The Michigan consumer sentiment survey is also due, expected to print at 75.0.
The S&P and the Dow added 0.62 percent and 0.62 percent respectively, with 10-year US Tresuries continuing to fall to 2.511 percent.
Despite attempts by Chinese officials to reassure markets, the bank funding fears continued to weigh on the Asia session. The China 7-day repo opened at 4.8 percent, up from 4.79 percent on the close, but the People’s Bank of China signalled that it would resume reverse-repo transactions if money market rates became elevated.
The New Zealand dollar had already come under pressure as risk-off sentiment drove selling of higher-yielding currencies, but Reserve Bank of New Zealand governor Graeme Wheeler added to Kiwi dollar pressure by commenting that mortgage curbs were beginning to work, reducing the need for further rate hikes in the near term.
NZD/USD is down 0.39 percent to USD0.8314.
This morning, sterling watchers will be looking to the UK Office for National Statistics third quarter GDP figures. Despite steady growth of late, recent soft construction numbers could signal a risk to the 0.9 percent consensus expectations.
Durable goods figures are due today in the US with are expected to be up 0.3 percent for the headline rate and 0.5 percent ex-transportation.
Wholesale inventories are expected to be up 0.3 percent month-on-month. The Michigan consumer sentiment survey is also due, expected to print at 75.0.