The US markets had a volatile wide overnight. DJIA tumbled more than -1000 pts in early trading, following the global selloff. Bargain hunters and short covering than helped the index pare back much of the losses. But towards the end of the session, investors gave up again as DJIA closed down -588.4 pts, or -3.57% at 15871.35, losing 16000 handle. S&P 500 also closed -77.68 pts, or -3.94% to close at 1893.21. That's marked the worst day in four years. While China stocks extended recent slide, other major Asian indices stabilized and recovered in Asian session today. In the currency markets, commodity currencies recover mildly today but stay the worst performing major currencies this week. Meanwhile, Euro, Yen and Swiss Franc remain the strongest.
In China, the Shanghai composite index opened at 3004.13, on the edge of 3000 handle, and hit an 8-month low. While the index recovered mildly since then, it's staying deep in negative territory and is trading down more than -4% t the time of writing. It's reported that the PBoC added the most funds to the financial system since last year in open-market operations. The China central bank auctioned CNY 150b of seven-day reverse repurchase agreements today. Comparing with the CNY 120b maturing today, CNY 30b will be injected. Also, PBoC sold CNY 60b of three month treasury deposits on behalf of the finance ministry at 3%.
In US, Atlanta Fed president Dennis Lockhart maintained that "normalization of monetary policy" will "begin sometime this year". But he now declined to say whether he favored a rate hike in September. That could be seen as a turn in his stance as he mentioned before that September hike "remains a live possibility" just two weeks ago. He also noted that developments including dollar's appreciation, devaluation of Chinese currency and further fall in oil prices are complicating the picture of growth.
On the data front, Australia conference board leading index dropped -0.2% in June. New Zealand RBNZ 2 year inflation expectation rose 1.9% in Q3. China conference board leading index rose 0.9% in July. German Ifo business climate will be a main focus in European session while GDP final will also be released. US will release house price indices, new home sales and consumer confidence.