Friday 16th August 2024: Japan Leads Asian Markets Amid Wall Street Rally

Global Markets:

•  Asian Stock Markets : Nikkei up 3.88%, Shanghai Composite down 0.08%, Hang Seng up 1.73% ASX up 1.37%
• Commodities : Gold at $2494.35 (0.06%), Silver at $28.23 (-0.40%), Brent Oil at $80.7 (-0.26%), WTI Oil at $77.79 (-0.34%)
• Rates : US 10-year yield at 3.911, UK 10-year yield at 3.9241, Germany 10-year yield at 2.241

News & Data:

• (USD) Core Retail Sales m/m  0.4% vs 0.1% expected
• (USD) Retail Sales m/m  1.00% vs 0.4% expected
• (USD) Unemployment Claims  227K vs 236K expected

Markets Update:

Japan’s stocks led gains across Asia on Friday, with the Nikkei 225 surging over 3%, marking its best week in four years. This followed a strong rally on Wall Street, where fresh economic data alleviated recession fears.

U.S. retail sales for July exceeded expectations, rising by 1% compared to the Dow Jones estimate of 0.3%. Additionally, weekly jobless claims fell, further boosting confidence. Stephanie Roth, chief economist at Wolfe Research, noted, “Today’s solid retail sales and claims data is a reminder that the sky is not falling on the U.S. economy. While economic momentum has cooled, a recession does not appear imminent.”

In Asia, Singapore’s non-oil domestic exports surged by 15.7% in July, a significant rebound from June’s 8.8% decline and well above the 1.2% growth forecast by Reuters. Total trade also saw a robust 13.7% increase in July, driven by rising exports and imports.

Japan’s broader Topix index gained over 2%, while South Korea’s Kospi rose by 1.75% after returning from a public holiday. The small-cap Kosdaq climbed 0.94%. Australia’s S&P/ASX 200 posted a 1.18% gain, although Reserve Bank of Australia Governor Michelle Bullock cautioned that it was “premature” to anticipate rate cuts, citing persistently high inflation.

Hong Kong’s Hang Seng index rose 1.69%, and mainland China’s CSI 300 saw a marginal increase. Taiwan and Hong Kong’s second-quarter GDP data were awaited after market hours. Overnight, U.S. markets continued to rally, with the Dow Jones, S&P 500, and Nasdaq Composite all posting significant gains.

Upcoming Events: 

• 12:30 PM GMT – CAD Manufacturing Sales m/m
• 12:30 PM GMT – USD Building Permits 
• 12:30 PM GMT – USD Housing Starts

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