Equity Brief Risk On In Asian Stocks Despite Weak China PMI

Stock market snapshot as of [01/07/2019 0600 GMT]

Ahead of the European session, Asian stock markets have kickstarted on a positive note for a brand-new trading month in Jul. Positive momentum plays were seen in technology sector that has been reinforced by the agreed trade war truce between U.S. and China post G20 summit and U.S. President Trump’s “180 degree policy U-turn” on China’s technology firm, Huawei by allowing U.S. corporations to resume business dealings with Huawei on certain products after it was blacklisted earlier due to U.S. national security concerns.
China A50 is the best performer that has rallied by 2.42% as at today’s Asian mid-session while Hong Kong’s stock market, Hang Seng Index is closed for a public holiday today. The USD/CNH (offshore yuan) has also weakened to a 4-week low of 6.8166 that has reinforced the on-going risk on scenario.
The outlier is the Korea’s Kospi 200 that has traded against the bullish trend of the rest. It is almost unchanged from last Fri, 28 Jun close due to negative trade related news flow as Japan has announced plans to enact export restrictions on some technology items to South Korea.
The S&P 500 E-mini futures has gapped up as well in today’s Asian session where it rallied by 0.80% to print a current intraday high of 2977. The on-going rally seen in risk assets has ignored the fundamental aspects of a “slowing global economic growth situation”. The latest China’s Caixin manufacturing PMI data for Jun has contracted the first time in four months since Feb 2019 where it has decline to 49.4 from 50.2 in May, also below consensus of 50.0.
European stock indices CFD futures are joining the risk on party as well where the both the FTSE 100 and German DAX are up by 0.89% and 1.48% respectively. Overall, the medium-term uptrend phase for stock indices remain intact. Click here for our latest weekly technical outlook report.

Manufacturing PMI data day for Europe and U.K where Germany’s manufacturing PMI data for Jun will be out at 0755 GMT and U.K’s manufacturing PMI out later at 0830 GMT.

Macroeconomic Calendar

*Data from Refinitiv. Index names may not reflect tradable instruments and not all markets are available in all regions

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.