Daily Market Review – 3.1.2019

Asia

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.

Europe

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.

 

US

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.

 

Commodities

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.  

Events

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.

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