Asian markets buoyed by stable data

Tuesday, July 01, 2014

Japanese stocks pushed higher overnight, building on Monday’s gains after Japanese companies outlined a better than estimated investment outlook. Both the Nikkei and TOPIX benchmark indices rallied higher on the release of the Tankan survey data compiled by the Bank of Japan. Particular attention was paid to large all industry capex, which saw growth exceed expectations of 6.0% in Q2, coming in at 7.4%. The figure was significantly above the prior period’s capex growth of 0.1% as Japanese companies continued to increase their investment plans despite the implementation of a higher sales tax which dented sentiment in the first quarter.

China’s official manufacturing PMI for June continued on the path of expansion, rising to 51.0 in June as expected from the previous months reading of 50.8. The government’s efforts to stabilise the economy seem to be having the desired effect as nine out of the twelve sub-indices indicated improvement from the previous month. The new orders sub-index increased to 50.3 in June from 49.3 in May, pushing above the 50 point level that separates expansion from contraction. The encouraging economic data will help boost sentiment, however, overhanging risks from a fragile property market remain and investors will continue to adopt a cautious approach as Beijing is not out of the woods yet.

Today will see the release of plenty of economic data which will keep investors engaged throughout the entire session. Chinese PMI data kicked off proceedings with figures coming in largely in line with expectations. Asian investors received a further boost from an encouraging Japanese investment outlook as the Tankan survey showed an improving outlook for large companies. Investors in Europe will have plenty of data to mull over today, notably German and eurozone manufacturing PMI as well as unemployment figures to look forward to this morning. UK investors will have manufacturing PMI data as well as the month-on-month Halifax house price data for June which is due out this week.

Tankan fixed investments surge higher in Q2

JTFIFILA Index Japan Tankan Fix 2014 07 01 07 37 43

China's official manfuacturing PMI confirms Beijing's efforts to stabilise growth

CPMINDX Index China Manufacturi 2014 07 01 07 42 37

 

Events for today

HK Market Holiday

0200

CN

Jun

Manufacturing PMI

0245

CN

Jun

HSBC Manufacturing PMI

0600

JP

Q2

Tankan Survey

0855

DE

Jun

Markit Mfg PMI

0900

EZ

Jun

Markit Mfg PMI

0930

UK

Jun

Markit CIPS Mfg

1000

EZ

May

Unemployment Rate

1445

US

Jun

Markit Mfg

1500

US

Jun

ISM Manufacturing

1500

US

May

Construction Spending

1500

US

Jul

IBD Sentiment

FN: 

Jul  Coffee (LIFFE)

 

 

Topics: PMI, Unemployment
More from: Kash Kamal