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Chinese equity 1mo high - EMEA brief 24th July



  • Asian market gain whilst Chinese shares hit a 1 month high on hopes of a government stimulus package. 
  • Hedge funds bet on higher government bond yields extending the USD gains, and prompting a gold sell off.
  • Oversupply worries continue with oil causing a drop in prices. 
  • Despite Google's Alphabet multibillion dollar fine, shares jump on results to a record breaking all time high.
  • Crypto markets currently up but generally trading in a range. 

Asian overnight: A positive session overnight saw gains across Japanese, Chinese, Hong Kong and Australian indices. Government bonds added to a sense of stability, with yesterday’s BoJ-fuelled volatility easing to give way to a move stable session. However, that Japanese theme continued on the data-front, with a weak manufacturing PMI (51.6 from 53.0) and BoJ core CPI (0.4% from 0.5%) adding to the difficulty for Japanese central bankers. It is clear that despite a whole raft of loose monetary policies, strong growth and high inflation remains elusive. 

UK, US and Europe: The PMI theme looks set to continue into the European session, with a whole raft of eurozone PMI surveys due out throughout the morning. Particular attention is likely to be paid to the manufacturing sector (particularly German) amid the trade war with the US. Once again, PMI surveys will be key in the US session, with both manufacturing and services PMI surveys providing the main economic releases of the day.

Economic calendar - key events and forecast (times in BST)

8am – 9am – French, German, eurozone PMIs (July, flash): eurozone services PMI to fall to 53.7 from 55.2, and mfg PMI to rise to 55 from 54.9. Markets to watch: eurozone indices, EUR crosses

2.45pm – US mfg & services PMI (July, flash): mfg expected to rise to 55.5 from 55.4, and services to fall to 56.3 from 56.5. Markets to watch: US indices, USD crosses

Source: Daily FX Economic Calendar

Corporate News, Upgrades and Downgrades

  • Hammerson said that full-year profits had fallen 81% to £55.7 million, although adjusted profit was up 0.5% to £120 million. Net rental income was down 3% to £178.5 million. The firm plans to sell £1.1 billion of property by the end of 2019. 
  • PZ Cussons said that pre-tax profit slipped 23% to £66.6 million, while the annual dividend was left unchanged at 8.28p per share. Tough conditions in Nigeria hurt performance.
  • Fevertree said that it expects full-year results to be ‘comfortably ahead’ of forecasts, as earnings rose 35% to £34 million for the first half. Revenue was up 45% at £104.2 million. 

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