Asia
Markets in the region reacted to the currency effects created by the Federal Reserve minutes, particularly a softening in the dollar, which increased the attractiveness of assets in yen, yuan and Hong Kong dollars.
That said, the Nikkei, Topix and Hang Seng indices struggled to remain in positive territory by the close. China’s CSI 300 index closed up over 0.5% to 3,721.28 as the market struggles to sustain gains made since May’s sharp rise from the 3,300 level. Indian stock markets continued their recent strong run, with the BSE Sensex and Nifty 50 both higher towards the close.
Europe
The standout economic data in the UK were July’s retail sales figures, which came in above forecast at 1.5% year on year – but this was less than the 2.8% outturn in June, when warmer weather increased demand for summer clothing ranges and associated products.
DIY products are often big sellers during a heatwave but this was not enough to buoy the results of B&Q owner Kingfisher (KGF), which were down by over 5% by midmorning UK time at 290p. B&Q sales were down nearly 5% on a like-for-like basis in the second quarter. Commodity and housebuilder shares were among the biggest risers in the FTSE 100. The FTSE 100 was off 0.25% at 7414 in morning trading.
In Europe, investors will be watching the European Central Bank’s minutes for clues about the state of the Eurozone’s economies. Eurozone Consumer Price Inflation fell 0.5% on a month on month basis in July, and was 1.3% higher on a year on year basis, suggesting that the ECB will be in no hurry to raise rates. European markets were marginally lower approaching midday CET, with Spain’s Ibex and the Swiss SMI the biggest fallers.
North America
US stock markets will get a chance to react fully to the Fed minutes, where members fretted about weak inflation missing the 2% target. On the flipside, more hawkish members of the FOMC were concerned that the labour market was tightening markedly. This split on the next direction of rates took the edge off the dollar overnight.
Thursday expects a range of US economic data, with the highlights being weekly job claims, the Philadelphia Fed Business Outlook for August, industrial production and manufacturing production. Earnings continue with this week’s retail theme, with Gap (GPS) and Wal-Mart (WMT) reporting. China’s online retail giant Alibaba (BABA), which is also listed on the NYSE, also reports.
In terms of Canadian data, June manufacturing shipment numbers are released during market hours. British Columbia-based bus maker Grande West Transportation (BUS) also reports today.
