Asian Stocks Talking Points:
- Equity markets slipped sharply on Monday
- Weak China trade data added to the weight provided by last Friday’s US payrolls miss
- The US Dollar slipped back as rate hike bets were rethought
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Asian stock markets were broadly lower as a new trading week got under way. Disappointing trade data of China released on Sunday gave investors pause, and perhaps served to underline the need for a trade settlement between that country and the US.
November’s exports rose by 5.4% from a year earlier, just a little over half the 10% rise markets had hoped for. It was also the weakest showing since the contraction seen in March. Exports to all of China’s usual major partner countries had slowed. Import growth was 3%, a mere sliver of the 14.5% hoped for and the worst print since October 2016.
With these data only adding to China-slowdown concerns it would perhaps have been surprising if stocks hadn’t shown some shock. Sure enough the Nikkei 225 was down 2.2% as its close approached. The Shanghai Composite was down nearly 1% and the Hang Seng slide by 1.5%. Australia’s ASX 200 shed 2.3%, its cause not helped by yet more weakness in Chinese iron-ore imports.
The ASX has now slid below its previous 2018 lows, returning to levels not seen since December, 2016.
The US Dollar was down sharply against major rivals on Monday. Much weaker than expected US employment numbers on Friday had market participants reassessing quite markedly their views as to how much further interest rates could now rise. The chance of a December rise is still put at around 70% by the Chicago Mercantile Exchange’s ‘Fedwatch’ measure.
Crude oil prices showed perhaps surprisingly little reaction to the decision made by OPEC and other major suppliers including Russia to cut output next year. Meanwhile gold prices were steady on t
Still to come on Monday, German and UK trade data, UK manufacturing and industrial production numbers. Canadian building permit levels are also due.
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--- Written by David Cottle, DailyFX Research
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