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China's Yuan Gains After PBOC, Asia Stocks Mixed


Standard Group (SDG) according to Bloomberg news on 6 August 2018 - The yuan extended gains following a rally triggered by a surprise China central bank move to make it more expensive to bet against the currency. Asian stocks were mixed Monday as the earnings seasons rolls on.

The offshore yuan built on gains from Friday when the People’s Bank of China announced a rule tweak in a bid to ease pressure on the currency. Equities were flat in Japan and shares dropped in China, while benchmark gauges edged higher across most of the rest of the region ahead of results from regional heavyweights HSBC Holdings Plc and Softbank Group Corp. The yield on 10-year Treasuries ticked up to 2.96 percent.

China stepped in to try to cushion the yuan after a record string of weekly losses saw the currency closing in on the key milestone of 7 per dollar. Sentiment in U.S. equities got a boost late in Friday’s trading session as the White House said officials had held high-level talks with China about trade in the past months and were open to more discussions.

Elsewhere, the Canadian dollar declined after Saudi Arabia froze all trade and investments with Canada. Oil and gold were steady.

Here are some key events coming up this week:

  • Earnings season includes results from: HSBC, SoftBank, Japan Post Bank, Disney, 21st Century Fox, Deutsche Telekom, China Mobile, Glencore and Adidas.
  • Tuesday brings the latest Reserve Bank of Australia meeting that is likely to produce no change in either the record-low cash rate or the long-term guidance.
  • The Bank of Japan releases a summary of opinions Wednesday from its July 30-31 meeting, at which it tweaked elements of its stimulus policy to make it more sustainable.
  • Samsung Electronics unveils its next Galaxy Note smartphone.
  • Japan announces a preliminary reading of second-quarter gross domestic product. Economists expect a solid rebound from a first-quarter contraction.
  • U.S. consumer prices probably rose in July, consistent with a pickup in inflation that’s projected to keep the Federal Reserve on a path of gradual interest-rate increases, economists forecast before Friday’s release.

These are the main moves in markets:

Stocks

  • The Topix index slid 0.1 percent as of 10:31 a.m. in Tokyo.
  • The Shanghai Composite dropped 0.2 percent.
  • Hong Kong’s Hang Seng Index rose 0.8 percent.
  • Australia’s S&P/ASX 200 advanced 0.5 percent.
  • S&P 500 Index futures were little changed. The S&P 500 rose 0.5 percent Friday.

Currencies

  • The yen traded at 111.23 per dollar.
  • The offshore yuan rose 0.2 percent to 6.8330 per dollar after climbing 0.5 percent Friday.
  • The euro bought $1.1566.
  • The Canadian dollar dropped 0.1 percent to 1.3000 per dollar.
  • The Bloomberg Dollar Spot Index added less than 0.1 percent.

Bonds

  • The yield on 10-year Treasuries nudged one basis point higher to 2.96 percent.
  • Japan’s 10-year bond yield was little changed at 0.1 percent.

Commodities

  • West Texas Intermediate crude was at $68.68 a barrel, up 0.3 percent.
  • Gold climbed 0.2 percent to $1,217.05 an ounce.
  • LME copper futures fell 0.7 percent to $6,164.50 a metric ton.