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Marketmind: Strikes, system failures and a slowdown

Published 29/08/2023, 02:34 pm
© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, August 2, 2023. REUTERS/Staff/File Photo
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A look at the day ahead in European and global markets from Tom Westbrook:

Workers at two Chevron (NYSE:CVX) liquefied natural gas facilities in Australia plan stoppages next week, putting European gas traders on edge and sending prices higher amid worries about potential supply interruptions.

Workers at Toyota plants in Japan were idle, meanwhile, as a systems malfunction crippling component orders brought output to a standstill for the world's top automaker.

That comes on the heels of tech woes at British air control on Monday that disrupted flights. Coincidence?

Probably, but perhaps it has all fed into expectations that economic data is going to come in soft for the rest of the week, which had investors spending the Asia session buying bonds.

Two-year Treasury yields dropped more than five basis points - a decent move for Asia hours - to below 5% and slightly narrowing the yield curve's inversion.

French and German confidence data is due later in the day, followed by U.S. job openings, where a slight decrease might point to a slowdown for broader labour figures that are due out on Friday.

FTSE futures suggest a positive return from a day's holiday in London, while U.S. and European futures were flat.

Japan's government said it may be at an inflection point in its 25-year battle with deflation, though that scarcely lifted the yen from Monday's 10-month low.

Japan's Nikkei touched a two-week top, while Chinese stocks were also on the shopping list in Asia, with foreigners turning buyers after Beijing signalled some interest in steadying markets by halving stamp duty on share trading.

Hong Kong's Hang Seng was up 2% by mid-session and mainland blue chips were up 1.5%. Both remain lower for the year so far, as does the yuan, which has hardly caught a boost as doubts about China's economic outlook remain heavy.

Trade tensions also lurk, with U.S. Commerce Secretary Gina Raimondo meeting her Chinese counterpart to discuss restrictions on chipmakers and chipmaking ingredients.

As the holiday season winds down, there are some signs it's been a good one: Tourism Holdings, the world's biggest campervan rental company, posted a record underlying profit and its shares had their best trading sessions since the pandemic, jumping 15%.

Key developments that could influence markets on Tuesday:

© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, August 2, 2023. REUTERS/Staff/File Photo

Data: German and French consumer sentiment, U.S. home prices, job openings

Earnings: Hewlett Packard, Best Buy

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