All the news you need in one place. Updated throughout the day.
August 5
Good evening everyone. Japanese shares ended the session higher today with the Nikkei Average soaring almost 0.5% to 20,614.06. Hong Kong’s Hang Seng Index meanwhile also managed to hold on to its gains, ending the day up over 0.4% at 24,514,16. The mainland markets however were not so lucky, after trading really weak the whole day, the SHCOMP fell 1.65% while the Shenzhen Composite slipped over 1%. In FX moves, the commodity currency rout seems to have regained steam with the aussie down 0.2%, the loonie down 0.02%, and the kiwi down 0.07%. Here’s what else you need to know:
Hong Kong PMI heads even lower. Business conditions in Hong Kong are not getting any better as the Nikkei/Markit Hong Kong PMI drops to 48.2 in July, down from a 49.2 reading in June. Any reading below 50 means a contraction in the economy. SCMP (paywall)
U.K. services PMI falls to five-month low. The U.K.’s services sector, arguably the most dominant part of its economy, posted a weaker than expected reading in July. Services PMI for the nation came in at 57.4, lower than 58.5 reading in June and slower than the 58.0 reading economists had previously forecast. Reuters
Greek banks are getting hammered again. For the third time in a row, Greek banks are getting slaughtered at the open. Piraeus Bank and Alpha Bank both tanked at least 29%, while Eurobank Ergasias dropped another 15%. Ekathimerini
“Lethal, autonomous weapons systems” are a bad move. Seriously, have these people not seen the Terminator? Financial Times (paywall)
Listen to “The Ice and Snow Dance,” one of the songs chosen for the 2022 Winter Olympics. I believe this is what people call an “homage.” SCMP (paywall) / Youtube
New IMF proposal stymies early yuan inclusion to the SDR. After all of Beijing’s efforts to include the yuan to the IMF’s Special Drawing Rights basket by 2015, IMF staff have just proposed to extend the current basket all the way to September 30, 2016. IMF
China’s services sector growth reaches 11-month high. A bump in new businesses sent China’s July services PMI to 53.8 – its highest level since August 2014 – and way up from June’s 51.8 reading. This is the index’s 12th straight month of expansion. Reuters
Japan services PMI sinks to 51.2 in July. While it’s still above the 50 mark separating expansion from contraction, the nation’s July services PMI reading came in lower than June’s 51.8 reading, highlighting just how delicate Japan’s recovery is at the moment. It isn’t that far off though and business sentiment is apparently growing stronger. Markit
Atlanta Fed president says rates could rise in September. Dennis Lockhart feels the economy is ready for a rate increase, and it would take a serious blow to economic data in the next few weeks to convince him to not vote for a rate rise in September. NexChange
U.S. factory orders surge 1.8% in June. After falling 1.1% in May, U.S. factory orders bounced back in June thanks to a 9.3% rise in transportation equipment orders. U.S. manufacturing inventories meanwhile climbed 0.6%, way more than what the Fed forecast in its second quarter GDP snapshot. Reuters
Brazilian real continues to fall. With the Brazilian economy deteriorating at a rapid pace, the Brazilian real has officially become the worst performing currency this year. After falling another 1% last night, the real’s year to date collapse against the dollar now comes in at a staggering 24%. Somebody must have made a killing here. Financial Times (paywall)
China to take a bite out of BMW’s earnings. The behemoth German carmaker recently warned that China’s continued downturn could spell disaster for the company’s projected profits. However, they were quick to add that they still expect “to break records again on group sales and pretax profit this year.” Reuters
SocGen says we’re all heading to a world of hurt. Societe Generale strategist Albert Edwards claims that western central banks have set us all up for an “even bigger version” of the 2007-2008 crisis, pointing out a combo of low rates and high fiscal deficits will eventually become the hand that’ll push us off the cliff. CNBC
Photo: Moyan Brenn