📰 What’s moving Markets?

Stocks:

• Mainland China equities dropped this morning as global funds have sold off $9.3 billion of China's blue-chip stocks due to concerns over a housing slump's impact.

• Shares in Hong Kong, Japan and futures in Europe and the US trade higher ahead of Nvidia's highly anticipated earnings. The result of the earnings report could lead to significant share-price movement and the options market anticipates volatility.

• Influential investor Cathie Wood purchased Zoom Video stock as its price declined, indicating potential confidence.

Bonds:

• S&P downgraded ratings of US regional banks due to challenging conditions; changes in deposits, funding costs, and loan-to-deposit ratios were considered.

• Yields rose in the US and Japan; the 10-year Treasury yield reached its highest since July, driven by strong economic data and expectations of prolonged higher rates.

• Positive US economic data shifted rate expectations; Federal Reserve likely to keep benchmark rate elevated.

• 10-year Japanese government bond yield reached a 9.5-year peak of 0.675%, driven by the Bank of Japan's hands-off approach.

FX:

• US dollar gained strength against a basket of currencies, hitting its highest level since mid-June on rate hike expectations.

• Japanese yen rose 0.2% against the dollar amid talk of potential intervention if the yen weakens significantly.

• People's Bank of China continued to set the yuan's official midpoint higher, signalling efforts to stabilize the currency.

Commodities:

• Iron ore prices surged 5%, coking coal and coke gained over 3% due to the absence of Chinese production cut directives.

• Oil prices are slightly higher, with Brent crude up 0.1% at $84.09 per barrel, US West Texas Intermediate crude also up 0.1% at $79.72.

• Gold prices rose 0.3% to $1,902.68 per ounce; uncertainty possibly driving demand for safe-haven assets.

📊 Chart of the Day

“Friendly reminder, recessions start when unemployment is extremely low and end when it’s extremely high, not the other way round” — Michael A. Arouet

US Unemployment Rate and Recessions

🤿 Deep Dive

Today’s Deep Dive, all about risks to global growth, is already helpfully summarised in TL;DR format by Torsten Sløk.

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

📆 Coming up this Week

Monday 21st August

• German PPI (YoY) consensus: -5.1%, last: 0.1%, actual: -6.0%

Company earnings (EPS): Zoom (beat)

Tuesday 22nd August

• Australia Manufacturing PMI consensus: 49.6, last: 49.6, actual: 49.4

• Japan Manufacturing PMI consensus: 49.5, last: 49.6, actual: 49.7

Company earnings (EPS): Lowe’s (beat), Baidu (beat)

Wednesday 23rd August

• France Manufacturing PMI consensus: 45.2%, last: 45.1

• Germany Manufacturing PMI consensus: 38.6%, last: 38.8

• Eurozone Manufacturing PMI consensus: 42.4%, last: 42.7

• Canada Retail Sales (MoM) consensus: 0.0%, last: 0.2%

• United States S&P Global US Manufacturing PMI consensus: 49.4%, last: 49.0

• Euro Zone Consumer Confidence consensus: -14.0%, last: -15.1

Company earnings: Nvidia, Analog Devices, Snowflake

Thursday 24th August

• United Kingdom GfK Consumer Confidence consensus: -29, last: -30

• Japan Tokyo Core CPI (YoY) consensus: 2.9%, last: 3.0%

• Japan Tokyo CPI (YoY) consensus: 3.0%, last: 3.2%

Company earnings: Intuit

Friday 25th August

• German GDP (YoY) consensus: -0.2%, last: -0.2%