ASIA STOCKS: Strong Week for Most, NIKKEI Hits New Highs
Japanese stocks rose for a third day, led by gains in the tech sector, on with gains from tech stocks in the US flowing through to buying of AI-related shares in Japan. Several key bourses in the regions have either hit or are approaching news highs this week on hopes for a cut in interest rates at the Federal Reserve. Signs of life for China's property developers as Evergrande jumped 40% on Friday morning on news of a possible bid. With the exception of the Jakarta Composite, which fell on the news of the departure of the Finance Minister, all major bourses have posted positive gains for the week.
- China's major bourses are finishing the week up with the Hang Seng leading the way. Up +1.53%, the Hang Seng is over +4.2% higher for the week. The CSI 300 is only marginally up today but higher by +1.98% for the week. The Shanghai Comp is up +0.24% Friday, and +1.89% for the week. The Shenzhen Comp is up +0.20% today, and +2.82% for the week.
- The NIKKEI is up again, reaching new highs of 44,812. Up 1% Friday, the weekly gain of just over 4% comes despite having one day of declines.
- Taiwan's TAIEX has seen major portfolio flows ramp up and is up +0.69% Friday and +3.66% for the week.
- The KOSPI is having a very strong period of late, up +1.28% Friday and +5.71% for the week on hopes that the planned tax changes to capital gains won't proceed.
- The FTSE Malay KLCI continues to underperform relative to regional peers. Up +0.42% today, it is higher by just +0.71% for the week.
- The Jakarta Composite is up +1.04% today but unable to recover from losses earlier in the week; to be down -0.49% week to date.
- The NIFTY 50 is higher by +0.35% Friday morning, and up +1.3% for the week.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
AUSSIE BONDS: Bull-Flattener Ahead Of Employment Data Tomorrow
ACGBs (YM +1.5 & XM flat) are slightly stronger after today’s wages data.
- Cash US tsys are slightly mixed, with a flattening bias, in today’s Asia-Pac session after yesterday’s twist-steepener.
- With May and June employment gains disappointing, tomorrow’s July data will be monitored closely for signs that the labour market has turned. Q2 employment averaged 28.8k/month up from Q1’s 1.4k but slightly lower than Q2 2024’s 32.2k. Bloomberg consensus expects a 25k gain in July after June’s +2k, slightly below the Q2 average. The unemployment rate is forecast to decline 0.1pp to 4.2%, returning to the Q2 average.
- In its updated staff projections on Tuesday, the RBA continued to expect the Q4 2025 unemployment rate to be 4.3% and then stay there. Employment growth was revised up to 1.6% from 1.4% in Q4 2025 and it then slows to 1.4% and remains there over the rest of the forecast horizon.
- Cash ACGBs are flat to 2bps richer with a steeper 3/10 curve and the AU-US 10-year yield differential at -5bps.
- The bills strip is flat to +2.
- RBA-dated OIS pricing is slightly softer across meetings today. A 25bp rate cut in September is given a 42% probability, with a cumulative 40bps of easing priced by year-end.
- The AOFM plans to sell A$1000mn of the 2.75% 2 1 November 2029 bond on Friday.
BONDS: NZGBS: Closed With A Modest Bull-Steepener
NZGBs closed showing a bull-steepener, with benchmark yields 2bps lower to 1bp higher.
- The NZ-US and NZ-AU 10-year yield differentials closed flat and 2bps wider, respectively.
- July NZ card transactions rose 0.6% m/m, the highest monthly increase this year, but the annual rate is still down 1.0%. Retail spending was up 0.2% m/m rising 1.2% y/y, signalling a gradual recovery in nominal consumption. It has been trending higher since the March trough at -1.8% y/y. The RBNZ is likely to cut rates on August 20 as inflation is in the band and the economic recovery remains subdued, and the July card data was consistent with this.
- Swap rates closed 1-2bps lower, with the 2s10s curve steeper.
- RBNZ dated OIS pricing closed slightly softer across meetings. 23bps of easing is priced for August, with a cumulative 41bps by November 2025.
- Tomorrow, the local calendar will be empty ahead of the July BNZ manufacturing PMI Index and July monthly price series on Friday.
- Tomorrow, the NZ Treasury plans to sell NZ$200mn of the 3.00% Apr-29 bond and NZ$250mn of the 2.75% Apr-37 bond.
OIL: Crude Range Trading, EIA US Stock Data & IEA Report Out Later
After falling around a percent on Tuesday, oil prices are little changed during APAC trading as the market waits for today’s IEA monthly report and US EIA inventory data, as well as the outcome of Friday’s Trump-Putin meeting. Ahead of this European and US leaders are holding a virtual meeting Wednesday to discuss Ukraine while President Zelenskyy has said they won’t cede the Donbas region. A truce is going to be difficult to reach thus making an easing of sanctions on Russia a distant prospect.
- WTI is slightly higher at around $63.23/bbl, close to the intraday high of $63.26. Brent is 0.2% higher at $66.23/bbl after rising to $66.24. Holiday-affected trading is resulting in lower volumes.
- The US EIA revised higher its global excess supply expectations for 2026 in its August report, while OPEC projected a tighter market (it tends to be the most optimistic of the three organisations). The IEA publishes later today and its output projections are likely to be monitored given ongoing excess supply concerns, which weigh on oil prices when geopolitical risks are in the background.
- Bloomberg reported that US oil inventories grew 1.5mn barrels last week, according to people familiar with the API data. In term of products, there was a gasoline drawdown of 1.8mn but distillate rose 300k. The official EIA data is out later Wednesday.
- Today the Fed’s Barkin, Goolsbee and Bostic speak. Apart from July updates for German & Spanish CPI, there are no data of note.
