The Japanese yen experienced a huge 250 pip gap yesterday as trading began in Asia. No explanations have appeared for the seeming flash-crash that echoed around the world; all major Asian indexes felt the push and closed in the red, this morning, led by Vietnam’s HNX at a percent 84. Meanwhile, the People’s Bank of China said the government is proposing new measures to boost consumption, and that it – in response – would be adjusting reserve ratio requirements for bank loans to SMEs.
As most PMIs yesterday came in flat to low, the UK figure posted a welcome half point gain – not enough, though, to prevent a strong down pull on the pound as markets closed. Meanwhile, European manufacturing is at its lowest level in 3 years – Britain’s is at a 6-month high.
Congress yesterday failed to enact a bill reopening the US government, and President Trump has invited leaders to the White House. In unrelated news, US equities continue to flounder after Apple posted a downgraded outlook, prompting a distinct bear gap in index futures with the opening of Asian session. Company shares tumbled 8% and CEO Cook blamed China. US Manufacturing is at a 15-month low, yesterday’s PMI dropping a point and a ½ to 53.8.
With the world still in risk mode, gold continues rising, adding nearly $8 on the troy ounce this morning. Oil continues sideways after losing half of its gains yesterday – this despite expectations of production cuts in Saudi Arabia and its OPEC allies.
Today’s afternoon will be dominated by US data, with mortgage applications in at noon jobless claims at 1:30, and the ISM’s manufacturing PMI at 3. Alongside that, we’ll be seeing construction spending. And then at 9:30 tonight, the API’s weekly crude oil inventories. After midnight, Japan reports its Nikkei manufacturing PMI and that’ll be followed by the Caixin services figure for China.