European shares were mostly higher Monday, tracking gains in Asia, as investors awaited the release of USA housing, inflation and manufacturing data this week. Contracts on Hong Kong’s Hang Seng Index fell 0.1 per cent in most recent trade, while those on the Hang Seng China Enterprises Index were little changed.
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If you peel back the number and look underneath, it becomes clear that it is the price consumption which has disappointed investors as the number has slipped even lower.
“This morning’s preliminary GDP prints came in lower than expected”, said Stephen Innes, a senior trader at forex firm OANDA Asia Pacific. Japan announced a 28 trillion yen ($265 billion) stimulus package in July in an attempt to prop up Japan’s moribund economy.
The mounting debt, at more than 240 percent of the national gross domestic product and the largest in the industrialized world, is partly attributable to costs related to the nation’s rapidly aging population and financing the social security costs involved.
Japanese businesses are suffering from the country’s strengthening currency, which has surged more than 18% against the dollar this year.
The Fed Bank of St. Louis President said he had become more dovish over the past six months and that he expects a single USA rate increase over his policy horizon.
Elsewhere, in the United Kingdom, market participants will be looking ahead to reports on employment, consumer prices and retail sales for further indications on the continued effect that the Brexit decision is having on the economy.
“GDP signals, especially for the business sector, that there is big downside risk”, Wang said. South Korean markets were closed for a holiday. Switzerland is to publish data on producer prices. The U.S.is to release a report on manufacturing activity in the NY region.
Business confidence has slumped to levels last seen when Abe swept to power in late 2012 on a ticket to fire up an economy beset by years of falling prices and weak growth. Overall, a second estimate of GDP across the Eurozone confirmed that growth halved to 0.3% from 0.6% in the first three months of the year. The average is now firmly in the green, with a gain of 6.20 points or 0.11 percent at 5,633.
In Australia, companies expected to release earnings include BHP Billiton, Wesfarmers, and Woodside Petroleum.
The downbeat data led investors to push back expectations for the next US rate hike. Given the uncertainties around the United States elections, the Fed may hold their fire with respect to another rate hike for this year. December odds were at around 45%.
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