US shares end near two-month lows
Major markets remained on the back foot on Friday as the last fortnight’s worries about China continued to weigh on sentiment.
US shares ended weaker with the S&P 500 down slightly after touching two-month lows on Friday while the Nasdaq dropped 0.1% after also hitting two-month lows.
Global markets have also been spooked by rising long-term bond yields with the benchmark US 10-year bond yield climbing to 4.33% last week – only one basis point away from the highest level since the global financial crisis.
Aussie hit by China worries, weaker local data
The gloomy sentiment around China saw the Australian dollar and Chinese yuan heavily sold last week.
The Australian dollar was also pressured after weaker wage and employment data that suggested the Reserve Bank of Australia is unlikely to hike rates for the foreseeable future.
The Chinese yuan was similarly pressured but saw a rebound on Thursday in a move that was reported as driven by intervention from state-owned banks. The move saw the USD/CNH fall from nine-month highs above 7.30 – widely seen as a key threshold for the People’s Bank of China.
Aussie hit by China worries, weaker local data
The gloomy sentiment around China saw the Australian dollar and Chinese yuan heavily sold last week.
The Australian dollar was also pressured after weaker wage and employment data that suggested the Reserve Bank of Australia is unlikely to hike rates for the foreseeable future.
The Chinese yuan was similarly pressured but saw a rebound on Thursday in a move that was reported as driven by intervention from state-owned banks. The move saw the USD/CNH fall from nine-month highs above 7.30 – widely seen as a key threshold for the People’s Bank of China.
PBOC decision key
China’s next potential move to provide support for their struggling economy will be in focus on Monday with the key monthly loan prime rate decision. Financial markets are looking for the PBoC to cut the one-year rate from 3.55% to 3.40% and the five-year rate from 4.20% to 4.05.
The latest PMI reports – which provide the most up-to-date reading of the global economy – are due on Wednesday. Most recently, the global manufacturing sector has continued to plumb new depths, most notably hitting China, Germany and commodities.
The services sector, which has remained strong as consumers continued to release post-pandemic pent-up demand, has recently started to wane.
Later in the week, all eyes turn to central banks, with the Jackson Hole symposium due. The late-summer getaway for global central bankers will be closely watched for signs of the next potential move from the US Federal Reserve.
Key markets start new week at lows
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 14 – 18 August
All times AEST
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