Outside Malaysia

Stocks Decline on Trade Woes; Treasuries Rise

Stocks fell as trade talks between the US and China struck another stumbling block, while Treasuries rose after a gauge of American manufacturing signaled contraction for the first time in 3 years. The S&P 500 decreased 0.7% to 2,906.27 while Dow Jones down 285.26 points (1.1%) to 26,118.02.

US Factory Gauge Signals Contraction as Global Woes Spread

A key US factory gauge unexpectedly contracted for the first time since 2016. The ISM’s PMI fell to 49.1 in August, weaker than all forecasts in a Bloomberg survey of economists. The group’s gauge of new orders dropped to a more than 7-year low, while the production index hit the lowest since late 2015.

Trump Sees Trade Deal Much Tougher on China If He’s Re-elected

Trump sought to prod China into doing a trade deal before the US presidential election in November 2020, or face even more difficult negotiations during his potential second term. Trump said in his tweet that the US is “doing very well in our negotiations with China,” without offering any specifics. He said he’s certain China would “love to be dealing with a new administration.” The tweet comes as Chinese and US officials are struggling to agree on the schedule for a planned meeting this month after Washington rejected Beijing’s request to delay tariffs.

Johnson Loses Key Brexit Vote and Moves to Trigger UK Election

Prime Minister Johnson put the UK on course for a snap general election after suffering a humiliating defeat for his Brexit strategy in Parliament. Members of the House of Commons voted 328 to 301 to take a crucial first step toward forcing Johnson to delay Brexit by 3 months in an effort to stop a no-deal split. It was a stinging blow on a day that earlier saw Johnson lose his ruling majority after one of his own Conservative colleagues defected to a rival party.

Spain Jobless Claims Rose Most for An August Since 2010

Th Spanish jobless claims had their worst August increase since 2010, according to the Spanish Ministry of Labor data. Jobless claims rose 54.4k in the month, while falling 116.3k from a year ago, to 3.066m. Historically the month of August nearly always sees a rise in claims due to employment seasonality.

Australia Holds Rate, Watches and Waits as Sydney Property Jumps

Australia’s central bank left policy unchanged as it waits to see how a combination of interest-rate cuts and tax relief impact the economy, with Sydney property prices already showing renewed strength. Governor Lowe kept the cash rate at a record-low 1%, as widely expected, to gauge if the economy is entering the “gentle turn” he predicted last month.

South Korea Inflation Hits Record Low as Trade Feuds Sap Demand

South Korea’s inflation fell to zero for the first time ever and economic growth was revised slightly lower, further dimming the outlook for an economy already hammered by trade battles and weakening global demand. The CPI rose 0% yoy in August, the statistics office data showed while GDP grew 2% yoy in the 2Q19, the Bank of Korea said.

Oil Hits 1-week Low as Trump Tweet Fuels Market Worries

Oil slid to the lowest in a week amid Trump’s dire trade warning to China and a surprise cutback in American manufacturing. Brent crude for November settlement fell US$0.40 to US$58.26 per barrel.

Source: Affin Hwang Research - 4 Sept 2019