Asia stocks traded mixed as the region mulled over a slew of data releases including varied Chinese PMIs

Harvey continued to exert influence over the energy space despite being downgraded to a tropical depression

Looking ahead, highlights include the German jobs report, Eurozone inflation, US PCE, Chicago PMI, Canadian GDP and BoE’s Saunders

ASIA

Asia stocks traded mixed as the region mulled over a slew of data releases including varied Chinese PMIs. Nonetheless, ASX 200 (+0.7%) and Nikkei 225 (+0.8%) were positive as early momentum rolled over from Wall St where tech outperformed and US GDP data beat estimates, with Nikkei 225 coat-tailing on the advances in USD/JPY above 110.00. Shanghai Comp. (-0.7%) and Hang Seng (-0.6%) traded negative after the PBoC refrained from open market operations, and as participants also digested Chinese PMI data in which Official Manufacturing PMI topped estimates but Non-Manufacturing PMI slowed. Finally, 10yr JGBs are lower with demand sapped amid outperformance of Japanese stocks and mixed 2yr auction..

Chinese NBS Manufacturing PMI (Aug) 51.7 vs. Exp. 51.3 (Prev. 51.4). (Newswires)

Chinese NBS Non-Manufacturing PMI (Aug) 53.4 (Prev. 54.5)

PBoC refrain from open market operations today, for a net daily drain CNY 40bln. Set CNY mid-point at 6.6010 (Prev. 6.6102)

Bank of Korea 7-Day Repo Rate (Aug) 1.25% vs. Exp. 1.25% (Prev. 1.25%). (Newswires)

EUROPE/UK

UK GfK Consumer Confidence (Aug) -10 vs. Exp. -13 (Prev. -12). (Newswires)

UK Lloyds Business Barometer (Aug) M/M 17 (Prev. 30)

UK is reportedly doubtful regarding EU flexibility in Brexit discussions. (Sky News)

EU Brexit negotiators were left “flabbergasted” after their British counterparts launched a legal deconstruction of the so-called “Brexit bill” Wednesday as the Brussels talks headed for an increasingly acrimonious impasse, EU sources have told The Telegraph. (Telegraph)

FX

USD strengthened as its major counterparts tested key levels and as commodity-linked currencies also continued to feel the ill-effects of Harvey on crude. As such, AUD/USD failed to sustain the support from better than expected Q2 Capex data and briefly gave up the 0.7900 handle, while NZD/USD slipped firmly below 0.7200. Furthermore, EUR/USD extended on this week’s pullback and GBP/USD eyed the 1.2900 level to the downside.

Australian Capital Expenditure (Q2) 0.8% vs. Exp. 0.2% (Prev. 0.3%). (Newswires)

Australian Private Capex Survey 2017-2018 (AUD)(Est.3) 101.8bln (Prev. 85.4bln)

COMMODITIES

Harvey continued to exert influence over the energy space despite being downgraded to a tropical depression, with RBOB futures rising to a fresh 2-year high after reports that the Colonial Pipeline (the largest refined products pipeline in the US) will shut its main gasoline line today. This pressured WTI crude futures although prices have since recovered, while gold (-0.4%) saw a mini flash crash and briefly slipped below USD 1300/oz before paring the majority of the move in the following minute, with the initial dip in prices attributed to a sudden large sell order.

Colonial Pipeline said the main diesel and jet fuel line to US northeast was shut on Wednesday evening and that the main gasoline line will be shut on Thursday citing storm related issues. (Newswires)

US

US Treasuries tracked risk sentiment, with the belly of the curve underperforming following a couple of strong sections on the back of stellar supply in the area. The long end ended relatively flat. However, concerns over rising North Korean tensions, and risks surrounding the US debt ceiling remain at the forefront of investors’ thought processes. US Sep’17 10y T-note futures settled at 127.02+, down 3+ ticks.

US President Trump failed to deliver any more details on his tax plan but urged Congress to deliver on tax-reform. (CNBC)

US President Trump said that they are working on NAFTA and will see what happens, while he added that they can hopefully renegotiate NAFTA and if not, they will end it. (Newswires)