The yuan slid to the weakest level since November and China’s sovereign bonds rallied after the central bank unexpectedly cut a key interest rate in an effort to boost its ailing economy. The Chinese currency slipped as much as 0.5% after policymakers lowered the rate on one-year loans — known as the medium-term lending facility — by 15 basis points to 2.5%. Only one of 15 economists surveyed by Bloomberg had predicted the move. The People’s Bank of China also trimmed its seven-day reverse repurchase rate by 10 basis points. Ten-year bond yields fell to the lowest since 2020 while the yuan has since pared some of its losses.
China’s benchmark share index slipped for a third day, while equity gauges for Japan and Australia both gained. Treasuries were little changed in Asia after 10-year yields had climbed to the highest since November in US trading. The Australian dollar weakened after wage data missed estimates. A raft of July economic data published after the rate decision added to signs China’s recovery is faltering. Industrial production and retail sales both expanded less than economists forecasts, while the urban jobless rate rose to 5.3% from 5.2% in June. Tension has been building in China’s financial markets as red flags pop up throughout the economy, but particularly in the troubled property sector. Sentiment has been soured by debt concerns at Country Garden Holdings Co., once the nation’s largest developer by sales, missed payments by one of the nation’s largest private wealth managers, and heavy losses at China-focused hedge funds. In US trading Monday, tech stocks had their best day in two weeks amid the prospect of a soft landing for the economy. The Nasdaq 100 rose 1.2% with gains led by AI-favorite Nvidia Corp. and other technology giants. Still, smaller stocks were under pressure, with the Russell 2000 touching the lowest in a month. The focus later this week will be on minutes of the Fed’s July policy meeting as traders seek clues on the central bank’s next move. Investors who’d bet on a pivot to easier policy this year are having to adjust their bets as officials signal they will keep interest rates higher for longer. In emerging markets, Argentina’s already-distressed debt slumped Monday after a populist who vowed to burn down the central bank won surprisingly strong support in a primary vote. Its under siege government submitted to a 18% currency devaluation. Oil rose and gold held near its lowest close since March as traders pared expectations for Fed rate cuts next year and beyond. US After Hours GRND +13.9%, ACLX +9.7%, NVTS +7.2% higher on earnings; LL +13.6% after exploring strategic alternatives; DSGN -33.6%, GETY -14.3% lower on earnings; DFS -3.6% falling after CEO resigns.
Nikkei +0.52% Hang Seng -1,08% CSI -0.65% Shanghai -0.48% Shenzen -0.92%
Eur$ 1.0910 CNH 7,3205 CNY 7.2792 JPY 145,52 GBP 1.2683 CHF 0.8779 RUB 97,9674 TRY 27.0538 WTI$ 82,52 Gold 1,906 BTC 29,344 ETH 1,840
S&P +0.14% Nasdaq +0.25% EuroStoxx +0.50% FTSE +0.18% Dax +0.38% SMI +0,16%
Macro :
- Europe’s airlines clash with Italian premier over planned fare cap
- Yuan Slides on Surprise MLF Rate Cut and Weak Data: Macro Squawk
- Saudi Arabia, UAE Buying Nvidia Chips: FT
- Rokos Hedge Fund Bet Billions on Tech in the Second Quarter
Keep an eye on :
- ALC SW : Alcon to Report Results; Shares Up 18.9% YTD: Preview
- ALFEN NA : Alfen Cuts FY Revenue Outlook On Destocking in EV Charging
- BSLN SW : Basilea Boosts FY Operating Income Forecast, Misses Estimates
- 1COV GY : Covestro Suitor’s Bid Plan, NKT Contract: EMEA Industrials Wrap
- DFDS DC : DFDS 2Q Ebitda Before Significant Items Beats Estimates
- ECV GY : Encavis Maintains FY Revenue Forecast
- FLS DC : FLSmidth 2Q Sales Meets Estimates
- HHFA GY : Hamburger Hafen 1H Ebit EU50.4M Vs. EU101.3M Y/y
- HUBN SW : Huber+Suhner 1H Ebit CHF47M Vs. CHF54.0M Y/y
- MED SW : Medartis 1H Ebitda CHF13.1M
- AERO SW : Montana Aerospace 1H Net Sales EU704.0M
- NOVN SW : Novartis Sandoz Mylight Study Meets Primary Efficacy Endpoint
- NVDA US : Nvidia’s Selloff Is a Good Entry Point, Morgan Stanley Says (1)
- PNDORA DC : Pandora Boosts FY Organic Revenue Forecast
- PPGN SW : PolyPeptide Group 1H Ebitda Loss EU19.4M, Est. Loss EU12.7M
- RECSI NO : REC Silicon 2Q Revenue $36.7M Vs. $29.1M Q/Q
- REDX LN : Redx Pharma Granted FDA Orphan Drug Status for Zelasudil
- RVRC SS : RVRC Holding 4Q Net Sales Misses Estimates
- SDRL NA : Seadrill 2Q Adjusted Ebitda $159M Vs. $85M Q/Q
- STMN SW : Straumann 1H Ebit Beats Estimates
- TECN SW : Tecan 1H Ebitda CHF101M Vs. CHF119.1M Y/y
- TEM IM : Mattr to Sell Pipe Coating Business to Tenaris for C$220 Million
- TSLA US : Tesla Rolls Out Lower Spec Models S, X That Are $10,000 Cheaper
- TWEKA NA : TKH Sees FY Adjusted Net Income EU131M to EU139M
- UBSG SW : UBS Agrees to Pay $1.44 Billion to Settle DOJ Mortgage-Bond Case
- WAWI NO : Wallenius Wilhelmsen 2Q Ebitda Beats Estimates