REUTERS/Nigel RoddisEngland’s Ian Bell avoids a delivery from Australia’s Ryan Harris during their fourth Ashes test cricket match at the Riverside cricket ground, Chester-Le-Street, northern England, August 11, 2013.
Good morning. Here’s what you need to know.
- Markets in Asia were mixed in overnight trading. The Japanese Nikkei fell 0.7%, the Hong Kong Hang Seng rose 2.1%, and the Shanghai Composite rose 2.4%. European markets are in the red across the board, with Germany 0.7% lower. In the United States, futures point to a negative open.
- The big mover to kick off the week is gold, which leapt more than 1.5% to a high of $US1333 an ounce when futures markets reopened Sunday night. This morning, it has backed off to around $US1323 an ounce, up only 0.8%. BofA Merrill Lynch technical strategists target a resumption of the bull trend to $US1410, and maybe even $US1450.
- Second quarter GDP figures in Japan came in well below expectations. The Japanese economy grew 2.6% in Q2 at an annualized rate, below economists’ consensus prediction for 3.6% growth. Business spending fell 0.1% year over year in the second quarter, versus forecasts for a 0.6% rise.
- Japan industrial production contracted 3.1% from the previous month in June and fell 4.6% year over year, versus a 3.3% and 4.8% contraction, respectively, in May. Capacity utilization fell 2.3% in June after rising 2.3% the month before.
- According to tech blog AllThingsD, Apple is set to announce its new iPhone on September 10. Taiwanese Apple supplier Pegatron said it sees revenues growing 40-50% in the third quarter as it ramps up shipments to Apple.
- A Chinese cargo ship has set sail through the Northeast Passage around Russia for the first time ever on a trip to the Netherlands. The route, an alternative to travelling through the Suez Canal and the Mediterranean Sea, could shave up to 15 days off normal travel time for shippers of Chinese goods to Europe.
- There are no economic data releases in the United States today, but the Treasury will release its monthly budget statement at 2 PM ET. Economists expect the Treasury to post a deficit of $US94.5 billion for July after recording a $US116.5 billion surplus in June.
- While this week will continue to be fairly quiet in markets as the summer doldrums continue, a rare confluence of major economic policy events is only a few weeks away. In September, market participants will have to deal with the next Federal Reserve monetary policy meeting, which could mark the first tapering of QE3, as well as the likely nomination of a new Fed chairman and a series of budget battles in Washington.
- What we could see this week though, according to Société Générale economists, is an end to the eurozone recession. Preliminary second quarter GDP data out of Germany and France later this week, the bloc’s two largest economies, are key to look out for.
- Goldman Sachs chief economist Jan Hatzius is out with a new study examining how major economic data releases move stock and bond markets in the United States. The conclusion: while the monthly jobs report and quarterly advance GDP release are the two biggest market movers, they also contain the least amount of information about the course of future economic growth.