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Market Report
Asian stocks climbed Wednesday along with U.S. and European equity futures as gains led by technology firms that propelled global shares to record highs show little sign of abating. Australian stocks outperformed, while Japan and South Korea posted more modest increases and China and Hong Kong fluctuated. Japanese shares rose on Wednesday after positive data on the U.S. manufacturing sector spurred hopes of a global economic recovery remains on track to bounce back from the COVID-19 pandemic. Stocks also got a boost after Chief Cabinet Secretary Yoshihide Suga emerged as the leading candidate to replace outgoing Prime Minister Shinzo Abe at a leadership election expected this month. If Suga becomes the new prime minister, this would suggest few major changes to economic policy and lesser chances of political instability, which are positives for equities, analysts said. The Nikkei 225 Index rose 0.31% to 23,209.27 by 0204 GMT, while the broader Topix index was up 0.2% at 1,619.05. S&P 500 futures rose after a climb in Apple Inc. again pulled the benchmark to an all-time high. Crude oil climbed above $43 a barrel as the pickup in economic activity in the U.S. and China signaled a pronounced recovery in crude consumption.
Here are some key events to watch this week:
U.S. jobless claims for the week ended Aug. 29 are due Thursday. U.S. jobs report Friday is forecast to show payrolls continued to rebound in August from virus lows.
https://www.bloomberg.com/news/articles/2020-09-01/fresh-u-s-stock-record-asia-shares-to-open-mixed-markets-wrap
https://www.reuters.com/article/japan-stocks-midday/japan-stocks-rise-on-u-s-data-easing-concerns-about-new-prime-minister-idUSL4N2FZ0G8
China sets yuan midpoint at 16-month high, but touch softer than expectations
China’s central bank on Wednesday set its official yuan midpoint at the highest level in nearly 16 months, following a sharp rally in the spot rate a day earlier. The People’s Bank of China (PBOC) set the midpoint rate at 6.8376 per dollar prior to the market open, 122 pips or 0.18% firmer than the previous fix of 6.8498. It was the strongest guidance rate since May 14, 2019. However, the guided rate was still slightly weaker than market expectations of 6.8318, with some traders suspecting that the authorities might be starting to get a bit uncomfortable with the recent rapid gains in the yuan. The onshore spot yuan finished trading at its strongest level in nearly 16 months on Tuesday, riding on improving domestic data and a widening interest rate gap favouring the Chinese currency.
https://www.reuters.com/article/china-yuan/china-sets-yuan-midpoint-at-16-month-high-but-touch-softer-than-expectations-idUSAZN0FRR00
Australia in first recession for nearly 30 years
Gross domestic product (GDP) shrunk 7% in the April-to-June quarter compared to the previous three months. This is the biggest fall since records began back in 1959 and comes after a fall of 0.3% in the first quarter. An economy is considered to be in recession if it sees two consecutive quarters of negative growth. Australia was the only major economy to avoid a recession during the 2008 global financial crisis - mainly due to demand from China for its natural resources.
https://www.bbc.com/news/business-53994318
Dollar edges higher on solid U.S. economic data
The dollar bounced off two-year lows on Wednesday as U.S. data pointed to a firm manufacturing activity, while the euro retreated from its highest levels since 2018 on profit-taking. Economic data published on Tuesday showed U.S. manufacturing activity accelerated to a nearly two-year high in August amid a surge in new orders, with the reading from the Institute for Supply Management highest level since November 2018. The U.S. data followed similarly upbeat Chinese and European manufacturing indicators. The dollar index =USD inched up 0.12% at 92.346, having hit its lowest since April 2018. Among antipodean currencies, the Australian dollar AUD=D3 changed hands at $0.73845, while the New Zealand dollar NZD=D3 traded at $0.6764. Elsewhere in the market, Sterling GBP=D3 traded at 1.3422, just below last year's high that followed the 2019 election of 1.3516. The Chinese yuan CNH=EBS was little changed, last up down 0.03% in offshore markets to 6.8266.
https://www.reuters.com/article/us-global-forex/dollar-edges-higher-on-solid-u-s-economic-data-idUSKBN25T066
https://www.marketwatch.com/tools/marketsummary?region=asia&screener=nyse
https://www.macrotrends.net/2566/crude-oil-prices-today-live-chart