With days to go before the Trump Xi summit at the G20, the US trade representative yesterday published a 50-page outline of ongoing Chinese intellectual property theft. Yesterday’s contagion of Asian markets, by US equity freefall seems to have abated. Most indexes closed in the green led by the Hang Seng’s ½% increase. Australia,s S&P, New Zealand’s Dow Jones, and the Nikkei all closed down. Japan’s industrial activity measure this morning shows a.9% contraction for September, while Australia’s leading index in October increased by 1/10 of a %. The central banks meeting minutes overnight has economic growth upped to 3 ½% for the coming year, but they’re keeping their present 1.5% interest rate for now.
European indexes are more optimistic this morning, all up in the ¾% plus region. Unemployment surprised to the upside in France in October, falling a tenth to 5.3%, while in the UK industrial orders increased to 10 from last month’s 6 point contraction. The pound continues to meander around the 1-28 level as investors wait for some kind of indication on Teresa May’s future and that of Brexit. While in Italy, another developing drama may be averted as deputy premiere salvini says his colleagues might be able to revise their budget deficit by lowering social benefit expenses. The threat is that otherwise the European commission may open procedures to outlaw that nation’s entire budget proposal.
The US dollar lost some of yesterday’s upward momentum as the index bloodbath took a slight rest during the Asian session. Yesterday’s major loser was the Dow, at minus 2.2%, this following a 1/5% reduction in building permits for October but a tenth point increase in the Redbook index. According to Bloombeerg, though, nothing seems to be on the horizon to support any optimism, and most pundits agree that the bear is upon us.
Yesterday’s plunge in oil prices was quashed after the APi reported a welcome 1.6 mn barrel reduction in crude inventories. Add to that Trump saying he wouldn’t punish the Saudis for murdering a journalist, thereby quashing fears of supply disruptions. Gold yesterday added $5 to the troy ounce as investors ran for cover in light of the equities tumble.
Still ahead today are mortgate applications, jobless claims and the Michigan consumers sentiment index from the US. At 1:30 – wholesale sales in Canada, and at 5 – the EIA’s crude stocks change. Finally, at 30 to midnight, Japan produces inflation and investment numbers.