Morning wrap (21.08.2023)

• Indices from Asia-Pacific traded mixed during the first session of a new week - Nikkei and Kospi gained 0.3% each, Nifty 50 added 0.2%, S&P/ASX 200 dropped 0.3% and indices from China traded down as much as 1%

• US and European index futures are trading little changed at the beginning of a new week

• The People's Bank of China cut the 1-year lending rate from 3.55% to 3.45% while the 5-year rate was left unchanged at 4.20%. This is a disappointment as market expected 15 bp rate cuts to both rates in an attempt to prop up ailing Chinese economy

• The United States gave the green light for the transfer of F-16 fighter jets to Ukraine. The Netherlands and Denmark have already announced they will transfer around 60 aircraft combined

• Decision to transfer F-16s to Ukraine has been strongly criticized by Russia and threatened to respond with stiff measures due to F-16s capability to carry nuclear weapons.

• Nomura cut its forecast for China's GDP growth in 2023 from 5.1 to 4.6%, citing weak data for July as a reason. Forecast for 2024 was left unchanged at 3.9%

• Japan decided to boost minimum hourly wage by around 4.2% in fiscal-2023, up from an around 3.3% increase in previous year

• New Zealand's trade balance came in at -NZ$1.107 billion in July (exp. +NZ$0.05 billion), as exports plunged while imports increased

• Cryptocurrencies are trading mixed today with Bitcoin dropping 0.2% at press time and Dogecoin adding 0.1%

• Energy commodities trade higher today - oil trades 0.7% higher while US natural gas prices rise 0.8%

• Precious metals trade a touch higher today - gold and platinum gain 0.1% while silver trades 0.3% higher

• EUR and GBP are the best performing major currencies while NZD and AUD lag the most

Chinese equities lagged regional peers today following a smaller-than-expected rate cut delivered by People's Bank of China. CHNComp has even briefly traded below 6,031 pts, reaching the lowest level since late-November 2022. Source: xStation5