US stocks have fallen sharply on weak earnings from Tesla and tech stocks. The Bank of Canada cuts again. A surging Yen is pushing the US dollar down and the Aussie and Kiwi dollars are being caught in the downdraft as well.
In our bonus deep dive interview ANZ’s Chief Economist for Greater China Raymond Yeung explains what needs to happen to revive China’s domestic demand as consumers refuse to spend more, despite looser monetary policy.
5 things to know:
The S&P 500 was down 1.8% and the Nasdaq was down 2.9% at 4am Sydney/Melbourne time after poor earnings from Tesla and tech stocks. The Bank of Canada cut rates for a second time, citing economic headwinds. ANZ Economist Bansi Madhavani says the focus is turning to US Q2 GDP & PCE data tonight.
The US dollar fell 1.2% to 153.7 Yen overnight. ANZ Head of FX Research Mahjabeen Zaman says carry trades are being unwound on a stronger Japan growth outlook ahead of the Bank of Japan meeting next week.
Australia’s July composite PMI fell slightly. Stronger services activity offset ongoing weakness in manufacturing. ANZ Economist Maddy Dunk says the Reserve Bank of Australia is watching business indicators like the PMI closely.
Malaysia’s annual June CPI came in at 2%, below the 2.2% consensus expectation. Core inflation stayed at 1.9%. Looking ahead, ANZ Economist Arindam Chakraborty says the Prime Minister has taken the removal of a petrol subsidy off the table for now - something that would have driven prices up further.
South Korea releases Q2 GDP figures today. ANZ Economist Krystal Tan is expecting flat quarterly growth, with the annual rate falling from 3.3% to 2.5% due to weaker domestic demand, which the Bank of Korea watch closely.
Cheers
Bernard
PS: Catch you tomorrow with reaction to those US Q2 GDP & PCE figures.