Asian Stocks Continue Winning Streak

Asian stocks continue their five day winning streak, buoyed by Global manufacturing data. This is the longest winning streak for the stocks since April.

Yesterday, a string of positive data was released across Europe and the US. In the Eurozone we saw manufacturing data which was at its highest level for 16 months which helped the EUR and the European stocks rise. In Spain June’s manufacturing data was at its highest level in 2 years.

While in the US manufacturing data for June recovered from May’s drop, surprising markets. The ISM data gained to 50.9 in June from 49.0 in the previous month showing clear signs of economic expansion. New orders gained to 51.9 last month from 48.8 in the previous month.

Stocks
Australian ASX 200 was the biggest mover in the Asian markets, with a gain of 1.81per cent. Mining stocks and positive PMI data in Australia pushed up the index. PMI data leapt up 5.8 points to 49.6 for last month. Investors and analysts alike expect the weaker AUD to make the Central Bank leave interest rates unchanged at the moment although it is expected that they will cut the rate later this year from the current low of 2.75 per cent.

Concerns of liquidity in Chinese banks set the Shanghai Composite lower by 0.41 per cent. While in Hong Kong the Hang Seng dropped 0.39 per cent. In Japan the Nikkei 225 was up by over 1 per cent following the Bank of Japan’s comments about expanding their monetary base to 36 per cent in June from 31.6 per cent in the previous month. Analysts had expected a hike to 41.2 per cent

Forex
In the steady forex markets the greenback was broadly higher against its counterparts and recovering some of yesterdays’ losses. The EUR was 0.4 per cent lower against the USD while the GBP lost 0.11 per cent. The biggest mover was the Aussie which dropped 0.76 per cent before the RBA interest rate decision and comments.

Commodities
The commodities saw gains on the back of talk of rising demand with Gold traveling 0.16 per cent up, Silver up 0.39 per cent and Copper gaining 0.07 per cent. Crude oil was up too, by 0.08 per cent pumped up by the global manufacturing data. Natural gas was at a 4 month low and lost another 0.21 per cent as weather forecasts stay warm.

What to watch today
Not quite as exciting economic calendar today but still a fairly volatile day ahead. Watch out for Spanish unemployment, Construction PMI in UK and PMI in Canada. The Fed’s member Dudley to speak today in the US and all signs pointing to US stocks opening higher in the European session.