Queensway Blog

News / Analysis

Finance Update – A Morning of Data-Asset Disjunct


Asia – BoJ optimism hits markets

Asia this morning is in the red. The Hang Seng is down 1.63%, the Nikkei- 0.66% and the Shanghai Composite -0.7% as Reuters reports that US-China investments have fallen 16% to a 9-year low.

The Yen is down fractionally despite optimism expressed by the Central Bank in its interest and policy decision overnight.

The NZD is down a half per cent despite GDP contracting by 12.4% YoY in Q2 – less than expected, and the AUD is down 0.29% despite unemployment falling to 6.8% in August.

Europe – Leyen – UK can’t change agreement

Apart from the FTSE (-0.44%), European indexes closed in the green yesterday, the DAX up 0.29% and the IBEX 1.06%.

The Euro is down 0.28% this morning after the zone’s trade surplus sailed past expectations to €20.3 bn. But the GBP is down less than half its cross-channel adversary (0.12%) as traders prepare for this morning’s central bank policy and interest rate decision. Expectations are for further stimulus after yesterday’s surprising unemployment jump and Parliament’s backing of Boris Johnson’s threat to undermine all so-far achieved Brexit agreements with the EU.

Yesterday, European Commission President Ursula von der Leyen said that the Brexit agreement cannot be changed unilaterally.

Americas – FOMC expected to stay solid

The FOMC yesterday decided to keep interest rates steady until inflation tops 2%, increasing Treasury & mortgage-backed securities holdings and stating that the expected fallout from the COVID pandemic will be less severe than expected.

Index futures this morning have lost about a per cent since the closing bell yesterday, indexes yesterday closing mixed. The Nasdaq lost 1.25%, and the DOW added 0.13%.

The USD added a ¼% despite a 2.5% contraction in mortgage applications and missed retail sales expectations in August. The NAHB’s housing index increased to a better-than-expected 83, and business inventories added 0.1% in July – as expected.

Commodities – Oil ignores EIA

Oil is down 1.15% for the session despite a better-than-expected 4.39 mB EIA withdrawal.

Corporate – FB could be split up

Facebook closed down 3.72% yesterday after Kim Kardashian called upon her followers to freeze their Facebook & Instagram accounts, but more so on the Wall Street Journal’s report that the Federal Trade Commission was instigating an anti-trust investigation, which could force the company to split off its competing acquisitions. Adding pressure, Australia’s chief regulator Rod Sims said the company would be the ultimate loser if it held back news rather than pay for its use.

Today, expect dividends from Rio Tinto and Home Depot.


08:00 AM GMT Italy Trade Balance
09:00 AM GMT EU CPIs
11:00 AM GMT UK BoE Policy & Interest rates. Retail sales tomorrow at 6 AM
12:30 PM GMT US Housing Starts, Building Permits & Jobless Claims
12:30 PM GMT Canada ADP Employment Change
11:30 PM GMT Japan CPIs


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