A series of weak economic data sent Asian equities falling the most in a month after Japanese machinery orders fell, Chinese inflation disappointed and US jobs numbers combined to subdue trading and produce falls in the equity markets.
Japan’s machinery orders dropped 14.8 percent in May from a month ago, the biggest fall since comparable figures were made available in 2005. They were also far worse than market expectations for a decline of 2.4% In the US, the world’s largest economy, U.S. government data showed payrolls increased 80,000 last month, less than a 100,000 gain forecast. April figures were revised to 68,000 from 77,000 nonfarm payrolls, whilst May’s numbers were revised to 77,000 from 69,000. Meanwhile in China, the world’s second largest economy consumer prices eased to a 29 month low in June, rising 2.2% from a year earlier, giving the central bank room for further policy easing. The country’s 1 year interest rate swap rate, the fixed cost needed to receive the floating 7 day repurchase rate, declined four basis points to 2.42%, the lowest level it has been since June 11.
The combination of poor indicators released was enough to temper any investor hope for economic growth and give concern that the biggest economies in the world are all experiencing genuine growth problems which will instigate further monetary policy measures by the world’s biggest central banks.
Hong Kong’s Hang Seng Index fell 0.53% overnight; Australia’s S&P/ASX200 dropped 0.74%, whilst Japan’s Nikkei 225 Index fell by 1.31%. Gold gained 0.20and Silver jumped 1.01%. European stocks indicate a lower opening when European markets begin and there was little movement in the currency markets with low volume trading. The highlight for binary traders today shall be the market reaction when ECD president Draghi speaks in the morning.
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