Five Things You Need to Know to Start Your Day
China takes action to support the yuan amid trade dispute, Abe’s bid for a historic third term and emerging-markets claim the spotlight as Turkey returns from a week-long holiday. Here are some of the things people in markets are talking about today.
China’s central bank signaled that it’s taking action to support the yuan as trade tensions with the U.S. show no signs of ending soon. Starting this month, banks resumed using an adjustment, known as the counter-cyclical factor, in the daily pricing of the currency against the dollar to counter the bias toward a weaker yuan, the People’s Bank of China said late Friday. China had suspended use of the factor in January, a move interpreted to mean that policy makers had grown more comfortable with the yuan’s trajectory after several months of gains against the dollar.
Seeking Another Term
Japan’s Prime Minister Shinzo Abe launched his bid for a historic third-straight term as ruling party president, attempting to put months of scandal behind him and become the country’s longest-serving premier. The widely anticipated announcement kicked off what was expected to be an easy campaign for leadership of the Liberal Democratic Party. Media surveys of lawmakers and party members who will vote Sept. 20 show Abe will probably fend off a challenge from former defense chief Shigeru Ishiba, with one Kyodo News poll last month showing the prime minister had the backing of 77 percent of LDP lawmakers.
August enters its final week with the trade wars still hanging over Asian assets as the MSCI Asia Pacific Index slides toward its third monthly loss in four. Among Monday's main data events will be Chinese industrial profits. Tuesday in the U.S. sees the release of trade data, one of the first updates since tension flared up with China. Economists predict the July goods-trade deficit widened. U.S. GDP comes out on Wednesday, followed by jobless claims on Thursday. Also on Thursday, New Zealand announces building permits, Japan releases retail sales figures and Australia details second-quarter capex and the accompanying survey on investment planning. Friday, as the month draws to a close, brings a region-wide data dump that includes: a Bank of Korea rates decision, Japan joblessness and industrial production and China official PMIs.
Asian equity futures were largely up after the S&P 500 Index hit a record high Friday. The Nikkei 225 Stock Average and Hang Seng Index contracts rose, while Australian futures signaled shares may edge lower. The dollar and Treasury yields declined Friday after Federal Reserve Chairman Jerome Powell signaled the Fed won't accelerate its tightening pace. Crude settled above $68 and gold jumped above $1,200. Meanwhile, Turkey’s lira whipsawed on Monday as local markets reopen after a holiday break.
John McCain Dies
John McCain, the 2008 Republican presidential nominee and Vietnam War hero who was a senior voice on defense and foreign policy in the U.S. Senate, has died. He was 81. In July 2017, McCain was diagnosed with an aggressive form of brain cancer. Tributes poured in for the onetime Navy pilot who was North Vietnam’s most prominent prisoner of war. After returning from 5 1/2 years of captivity, McCain began a congressional career of more than three decades that made him a force in national politics. He ran for president in 2000 and 2008, winning the Republican nomination in his second campaign but losing to Democrat Barack Obama. The Arizona Republican was frequently a sharp critic of President Donald Trump.
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