Asia (Up)
China’s yuan fell for the ninth straight session on Monday, to a new 11.5 year low for the currency, as investors remained uncertain of a trade deal between Beijing and Washington. The currency has lost over 3% since the beginning of August itself.
Stocks rallied on Thursday as China hinted that it would not retaliate to recently imposed US tariffs for now. Shares across Asia rallied on Thursday as well as this morning, with the Shangai composite and Shenzen component rising by 0.6% and 0.7% respectively. In Japan, the Nikkei 225 rose 1.04%, while the Topix index surged 0.97%. Similar gains were seen in Hong Kong, with the Hang Seng index rising 0.81%. Meanwhile in South Korea the Kospi gained 1.63%, while Australia’s S&P/ASX 200 was up 1.18%. Overall, the MSCI Asia ex-Japan index gained 0.87%
USA (Up)
The market started the week on monday in the negative as the Treasury yield curve inverted further, stoking fears of a recession. The spread between the 2 year note and 10 year bond was further widened to 4.6 basis points by market close on Tuesday. Meanwhile, the S&P 500 lost 0.32% while the Dow and Nasdaq were down 0.47% and 0.34% respectively.
The market recovered through the week with the S&P 500 and Dow, both gaining 1.3% to close at 29,24.58 and 26,362 respectively on Thursday. The rally in stocks was propelled by statements from China indicating that they wished to resolve the ongoing trade dispute with the United States with a calm composure and do not have any intentions of retaliating against the latest round of US tariffs.
US Treasuries edged lower on Thursday, pushing yields higher across the curve. The 2 year yield was up one basis point at 1.52%, while the 10 yield was up two basis points at 1.49%. was up 0.7% to $56.15 per barrel.
The ongoing trade war has resulted in a flight to quality, with the SPDR Gold Trust (GLD) and iShares Silver Trust (SLV) up by 8.2% and 12% respectively through the month of August.
Europe (Up)
Markets closed higher on Thursday due to developments in the US-China trade war and comments from central bank officials. The Stoxx 600 closed 1% higher with gains in all sector territories.
Developments in the UK are being monitored closely by investors as Prime Minister Boris Johnson will suspend Britain’s parliament for more than a month before the country’s departure from the European Union. This would potentially ruin efforts from opposition parties to block a chaotic no-deal exit if Johnson is unable to secure a new deal with the bloc before October 31.
Italian politics is also in the limelight as President Sergio Mattarella handed a fresh mandate to Prime Minister Giuseppe Conte to form a government, comprising a coalition between the Five Star Movement and the opposition Democratic Party.
French industrial giant Bouygues gained 6.75% on Thursday as the firm beat market expectations. British software firm, Micro Focus, hit their lowest share price this year, as the firm cut its full-year guidance to trade 30% lower by the end of the day.
