Asia shares are comforting with China trading data, yuan fix By Reuters
By Wayne Cole
SYDNEY (Reuters) – Asian stocks tried to meet on Thursday as Beijing reported better trading numbers while limiting the fall in the yuan, providing temporary relief from fears of a global currency war. [19659002] Data showed that Chinese exports rose 3.3% in July from a year earlier, when analysts had seen a 2% decline. Imports also declined less than expected, suggesting some resilience to the drawn-out US-US tariff war.
Beijing helped fix the yuan at a firmer level than many had feared, even though it was above $ 7 per dollar level for the first time since the global financial crisis.
Markets responded by taking back some of the recent major losses. MSCI's broadest index of equities in Asia and the Pacific off Japan jumped 0.6%, though it was still more than 7% over the past two weeks.
Japan's edges rose 0.6%, away from seven-month lows, while Chinese blue chips rose 0.9%. E-Mini futures for the S&P 500 strengthened 0.2%.
Investors have increasingly feared that the trade war will prove long enough to tip the world into recession, and have piled into bonds and gold as a hedge.
"Financial markets are increasing the risk of recession," said JPMorgan (NYSE 🙂 economist, Joseph Lupton.
"Stocks continue to slide and volatility has spiked, but the alarm is highest in the stock markets, with the yield curve turning the most since just before the financial crisis began."
Yield on US 30-year bonds plunged as deep as 2.1[ads1]23% overnight, not far from a low level of 2,089% set in 2016. Ten-year rates fell further below the three-month rate, an inversion that has reliably predicted recessions in the past.
The latest spasm began when central banks in New Zealand, India and Thailand surprised the markets with aggressive relief, while the Philippines is expected to cut later on Thursday.
GRAPHS: Asia stock marking etching – https://tmsnrt.rs/2zpUAr4ebrit19659002??GRAPHIC: Asia-Pacific valuations – https://tmsnrt.rs/2Dr2BQA Chapter19659002â‚‚FED TO RESCUE?
"The decision by these APAC central banks to" go hard and early "has added further fuel to the concerns of a global recession," said Rodrigo Catril, a senior FX strategist at National Australia Bank. "This also means the Fed will need to come to the rescue."
Chicago Fed President Charles Evans signaled Wednesday that he was open to lower prices to boost inflation and counter the risk of economic growth from trade tensions.
Futures moved to price with a 100% probability of a September Fed easing and a near 24% chance of a half-point cut. About 75 basis points for easing are implied by January, with interest rates eventually 1%.
Unfortunate data on German industrial production is concerned that Europe may already be in a recession, pushing bottom yields deeper into negative territory.
speculated that the major central banks also had to take drastic measures, if not just to prevent an export-shrinking increase in their currencies.
The Bank of Japan would be under particular pressure as the yen has risen sharply from the flood to safe havens, leaving it at 106.20 per dollar from $ 109.30 just a week ago.
The euro has also jumped to $ 1.1210, from a two-year trough of $ 1.1025, while it has traced back to 97.523, from a recent peak of 98.932.
The New Zealand dollar picked up the chips after slipping as much as 2.6% on Wednesday as the country's central bank cut interest rates by steep 50 basis points and flagged the risk of negative interest rates.
$ 0.6456 after throwing 1.1% for the week so far.
The rapid decline in returns helped lift gold above $ 1500 for the first time since 2013. was last at $ 1,500.23 per ounce, after being as far as $ 1,510 on Wednesday. The precious metal has increased by 16% since May.
Oil prices regained some ground that talk about Saudi Arabia's mulling opportunities to halt the descent of crude helped offset a build-up of stocks and fears of reducing demand.
futures climbed $ 1.53 to $ 57.76, though it followed steep losses on Wednesday, while rising $ 1.50 to $ 52.59 per barrel.
