📰 What’s moving Markets?

Stocks:

• China's central bank unexpectedly reduces key interest rates, leading to a slide in Chinese stocks for the third consecutive day. The sentiment is worsened by weak economic data including lower-than-expected industrial production and retail sales.

• Asian stock markets remain at one-month lows, majorly impacted by China's economic situation which overshadows Japan's strong GDP growth (+6% YoY versus +3.1% expectations).

• Wall Street sees a rise, with the S&P 500 finishing 0.6% higher and the tech-driven Nasdaq Composite increasing by 1.1%. Nvidia recovers with a 7.1% boost.

• Japan, Australia, US, and European futures point towards a positive open today.

Bonds:

• The People's Bank of China lowered the rate on $55.25 billion worth of MLF loans by 15 basis points to 2.50% from 2.65% earlier. Chinese sovereign bonds rally post-rate cuts; 10-year and five-year Chinese government bond yields drop to their lowest since 2020.

• Yields on two-year US Treasuries rise to 4.97%, with 10-year notes slightly higher at 4.2%.

FX:

• The yuan weakens to its lowest since November due to rate reductions by the PBOC.

• The ruble crashes past 100 per dollar, prompting an emergency meeting by the Bank of Russia; JPMorgan anticipates further rate hikes.

• The US dollar strengthens by 0.3%, driven by recent data suggesting a resilient US economy.

Commodities:

• China's economic data puts downward pressure on oil prices; Brent crude settles at $86.21 a barrel, and West Texas Intermediate drops to $82.51.

• China's struggling property sector continues to raise alarms, with significant developers like Country Garden facing liquidity issues.

📊 Chart of the Day

US Bankruptcies continue to rise, likely due to higher base rates increasing the cost of debt.

US Bankruptcies of companies with a minimum $2m assets or liabilities

🤿 Deep Dive

Argentina just raised interest rates to 118%. Yes, you read that right, one-one-eight percent. Source: click here.

If you’re pressed for time, here’s the TL;DR:

• Argentina's central bank raised interest rates to 118% and devalued the currency to 350 Pesos/USD.

• The country voted for the unexpected Pro-Bitcoin candidate, Javier Milei, due to its economic crisis.

• Milei, who got 30.5% of the votes, wants to "axe the Central Bank."

• Amidst an economic crisis, Argentina faces high inflation and dwindling central bank reserves.

📆 Coming up this Week

Monday 14th August

• Japan GDP (YoY) consensus: 3.1%, last: 2.7%, actual 6.0% 

• China Industrial Production consensus: 4.5%, last: 4.4%, actual: 3.7%

• China Retail Sales consensus: 4.8%, last: 3.1%, actual: 2.5%

Company earnings (EPS): Suncor (beat), monday.com (beat)

Tuesday 15th August

• Canada Headline CPI (YoY) consensus: 2.7%, last: 2.8%

• United States Retail Sales consensus: 1.50%, last: 1.49%

• United Kingdom Unemployment Rate consensus: 4.0%, last: 4.0%

• Japan Industrial Production consensus: 2.0%, last: -2.2%

Company earnings: Home Depot, Nu, Sea

Wednesday 16th August

• Euro Zone GDP (YoY) consensus: 0.6%, last: 1.1%

• Euro Zone Industrial Production consensus: -0.6%, last: 0.2%

• Australia Unemployment Rate consensus: 3.5%, last: 3.5%

• Japan Trade Balance consensus: 24.6B, last: 43.0B

• United States Industrial Production consensus: 0.3%, last: -0.5%

• United Kingdom Headline CPI (YoY) consensus: 6.8%, last: 7.9%

• United Kingdom Core CPI (YoY) consensus: 7.4%, last: 6.9%

Company earnings: Target, Cisco, Tencent

Thursday 17th August

• Japan National CPI (YoY) consensus: 2.5%, last: 3.3%

• United States Jobless Claims 4-Week Avg. consensus: 229.63K, last: 231.00K

• United States Philadelphia Fed Manufacturing Index consensus: -10.0, last: -13.5

Company earnings: Walmart, Applied Materials

Friday 18th August

• Euro Zone Core CPI (YoY) consensus: 5.5%, last: 5.5%

• Euro Zone Headline CPI (YoY) consensus: 5.3%, last: 5.5%

Company earnings: John Deere, XPeng