Global Markets:
- Asian Stock Markets : Nikkei down 2.51%, Shanghai Composite up 0.32%, Hang Seng up 0.51% ASX down 0.27%
- Commodities : Gold at $2469.5 (0.47%), Silver at $30.61 (0.84%), Brent Oil at $85.13 (0.57%), WTI Oil at $81.99 (0.71%)
- Rates : US 10-year yield at 4.169, UK 10-year yield at 4.110, Germany 10-year yield at 2.418
News & Data:
- (USD) Building Permits 1.45M vs 1.40M expected
- (USD) Housing Starts 1.35M vs 1.30M expected
Markets Update:
Asia-Pacific markets declined sharply due to a fall in chip-related stocks following stricter U.S. export restrictions and comments from former U.S. President Donald Trump, increasing geopolitical tensions. Japan’s Nikkei 225 fell by 2%, and the Topix index decreased by 1.17%. Tokyo Electron shares dropped around 10%, with other chip-related stocks like Advantest and Organo falling nearly 5% and 3%, respectively. South Korea’s Kospi index dipped by 1.26%, and the small-cap Kosdaq lost 0.9%, with Samsung Electronics down nearly 2%.
Taiwan Semiconductor Manufacturing Company (TSMC) shares dropped more than 3%, leading the Taiwan Weighted Index to fall by 2%. The Nasdaq Composite in the U.S. fell nearly 2.8% overnight, marking its worst day since December 2022, as investors favored rate-sensitive stocks over large tech companies amid hopes for possible rate cuts following Federal Reserve Chair Jerome Powell’s comments on maintaining higher rates for longer.
In Asia, Japan’s latest trade data showed exports increased by 5.4% year on year in June, down from 13.5% in May, while imports grew by 3.2%, down from 9.5% in May. Both exports and imports missed expectations. Japan’s trade balance shifted from a 1.2 trillion yen ($7.7 billion) deficit in May to a 224 billion yen surplus. Hong Kong’s Hang Seng index and China’s CSI 300 were exceptions, with stocks rising by 0.5% and 0.31%, respectively.
Australia’s S&P/ASX 200 declined by 0.27% after the unemployment rate rose slightly to 4.1% in June. Employment increased by around 50,000 people, while the number of unemployed rose by 10,000. In the U.S., the Dow Jones Industrial Average gained 243.60 points, or 0.59%, to close at 41,198.08, while the S&P 500 fell by 1.39%, with the information technology and communication services sectors being the weakest performers.
Upcoming Events:
- 12:15 PM GMT – EUR Main Refinancing Rate
- 12:15 PM GMT – EUR Monetary Policy Statement
- 12:30 PM GMT – USD Unemployment Claims
- 12:30 PM GMT – USD Philly Fed Manufacturing Index
- 12:45 PM GMT – EUR ECB Press Conference
