• With the US stock markets closed due to the Labor Day holiday, investors around the world are looking for direction by taking note of what’s happening in Asia & Europe. China’s stock markets rose as investors digested the current US Unemployment Rate figure which is expected to keep the Fed Funds Rate in place at this month’s FOMC Meeting decision, while market participants also await further stimulus from the Chinese government. Elsewhere, international leaders are set to attend the G20 summit in India later this week, although the meeting is unlikely to be attended by Chinese President Xi Jin Ping.
• Rallying stocks in China brought their main stock exchanges up over 1%. Meanwhile, Hong Kong’s Hang Seng index rose more than 2%, supported by news that Country Garden Holdings had received approval from its bondholders to extend its debt maturity.
• Oil prices rose to near 3-week highs in choppy trade on optimism that the world’s major oil producers will agree to continue production cuts to keep supplies tight. OPEC+ continues production cuts of 1 million barrels/day into October. In addition, the chance that the Fed will not raise interest rates this month also helped to lift Oil prices.
• World leaders will gather in New Delhi for the G20 summit this weekend. They will discuss matters ranging from the war in Ukraine to climate change, despite the possible absence of China and Russia.
• European Central Bank (ECB) President Christine Lagarde is scheduled to give some statements regarding what monetary policy the central bank will take at their meeting this month. Today’s statement comes after German economic data showed that their exports fell 0.9% in July as global demand weakened. In addition, Spain’s unemployment rate increased by 0.9% mom in August, putting 2.7 million people unemployed.
• Consumer spending in the UK fell last month, adding to signs of an economic slowdown. Growth in consumer spending using credit and debit cards weakened 2.8% on an annualized basis in August, compared to 4.0% in July; which the bank blamed on a continuation of the previous month’s gloomy conditions. As for the weakening trend, it also reflects the softening of inflation, evident in the 20% drop in vehicle fuel prices, while spending on daily essentials such as food and fuel only rose by around 1%, the lowest growth since April 2020.
• South Korea released 2Q23 GDP data earlier this morning, which came in at the same level as the previous quarter at 0.9% yoy. While Japan announced Household Spending in July plunged to -5.0% yoy and -2.7% on a monthly basis, against expectations of a positive growth of 0.7%. Fortunately, the au Jibun Bank Japan Services PMI (Aug.) was just announced as forecast at 54.3, further expanding from 53.8 in July. Later today, the Caixin Services PMI & Chinese Composite PMI (Aug.) will be the focus of attention for the market.
• A number of PMI data from continental Europe will also be monitored, especially from French, German, Eurozone and UK investors. Notably, the Eurozone will also announce its Inflation rate at the producer level where PPI (July) is expected to experience deeper deflation of minus 7.6% yoy, from -3.4% in the previous month.
• JCI made another gain at the highest Closing point this year, testing the psychological level for the second time in the last four days. Although the Closing has not yet managed to cross into the 7 head region, NHKSI RESEARCH is still optimistic that the bullish note can still be maintained, amidst the shadow of RSI negative divergence. Investors/traders are advised to add buy gradually, in order to stay safe.
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