US-China trade, Australia jobs data, currencies in focus

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Stocks in Asia traded lower on Thursday morning following an overnight slip on Wall Street, as investors await the release of Australian employment data.

The Nikkei 225 fell 0.79% as shares of index heavyweights Fast Retailing, Softbank Group and Fanuc declined. The Topix also shed 0.76%.

Data from the Ministry of Finance released prior to the market open in Tokyo showed Japan’s exports falling 6.7% in June as compared to a year ago, against expectations of a 5.6% decline from economists in a Reuters poll.

South Korea’s Kospi declined 0.28% as shares of Celltrion dropped 1.63%.

In Australia, the S&P/ASX 200 traded 0.19% lower. Shares of miner South32 rose 0.5% after the firm reported a 69% surge in its full-year coking coal production, besting analyst estimates.

Investors will be watching out for the release of Australian jobs data, set to be released at 9:30 a.m. HK/SIN.

Apple supplier Taiwan Semiconductor Manufacturing Company is also set to release earnings on Thursday.

Asia-Pacific Market Indexes Chart

Overnight on Wall Street, the Dow Jones Industrial Average fell 115.78 points to end its trading day at 27,219.85. The S&P 500 slid around 0.65% to close at 2,984.42. The Nasdaq Composite finished 0.46% lower at about 8,185.21.

Stocks stateside closed at their lows of the day just after the Wall Street Journal reported that trade negotiations with China are at an impasse over restrictions on Huawei, citing people familiar with the talks.

On Tuesday, U.S. President Donald Trump said there’s still a long way to go before a deal with China can be reached, while threatening to slap tariffs on another $325 billion worth of Chinese goods.

“Donald Trump’s renewed trade threats this week undermine relief from the resumption of US-China trade talks agreed to by Presidents Trump and Xi at June’s G20 meeting,” Vishnu Varathan, head of economics and strategy at Mizuho Bank, wrote in a note on Thursday.

“This is a timely reminder that it is too complacent to regard US-China risks as having a short ‘half-life’, which proportionally declines with progress on bi-lateral trade talks,” Varathan said.

Meanwhile, profits posted during the ongoing earnings season stateside were better than expected. More than 7% of S&P 500 companies have reported second-quarter earnings thus far, according to FactSet data. Of those companies, about 85% have posted profits that beat analyst expectations.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.193 after dipping below the 97.2 level yesterday.

The Japanese yen, widely viewed as a safe-haven currency, traded at 107.96 against the dollar after strengthening from levels above 108.0 yesterday. The Australian dollar changed hands at $0.7008, close to lows around $0.700 seen in the previous session.

Oil prices slipped in the morning of Asian trading hours, with international benchmark Brent crude futures declining 0.14% to $63.57 per barrel, while U.S. crude futures fell 0.33% to $56.59 per barrel.

Here’s a look at some of the data set to be released in the day ahead:

  • Australia: June employment data at 9:30 a.m. HK/SIN
  • South Korea: Bank of Korea interest rate decision at 9:00 a.m. HK/SIN
  • Indonesia: Bank Indonesia interest rate decision at 3:30 p.m. HK/SIN

— Reuters and CNBC’s Fred Imbert contributed to this report.



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