Updated throughout the day
August 20
More bad news from Mainland China as the Shanghai and Shenzhen Composite indices finished 3.42% and 3% lower, respectively, at 3,664.29 and 2,155.49. The CSI 300 Index, meanwhile, ended 3.21% weaker at 3,761.45. It was an equally glum picture which Hong Kong’s Hang Seng Index despite a last minute upward surge was unable to claw back from its lunchtime losses and closed 1.77% down at 22,757.47 – it is now technically in bear territory.
Over in Central Asia, Kazakhstan became the latest emerging market to abandon efforts to prop up its currency and relinquished control of its exchange to let the Tenge drop an historic 23%. Further West, the Turkish lira also fell sharply, briefly touching 3.0 per US dollar, as conflict and political turmoil to the south of the country undermined investor confidence. Here is what else you need to know:
U.K. retail sales climb 0.4% in July. Strong household good sales helped propel July’s reading come in 0.1% higher than June’s 0.3%. Average store prices meanwhile fell 3% on a year-on-year basis, largely thanks to the massive drop in oil. BBC
Oil prices hit Norway hard. It wasn’t just the krona that got hit thanks to crude oil’s slide, Norway itself saw its GDP contract 0.1% quarter-on-quarter. Financial Times (paywall)
North and South Korea are at it again. The two halves of a divided Korea have exchanged fire today over their heavily fortified border. The South Korean Defense Ministry says it detected a small rocket fired from the North toward the western province of Gyeonggi. The South Korean military responded by firing a few dozen shells at the area from which the projectile was fired. CNN.
Kiwi consumer sentiment dips to its lowest in three years. The ANZ Consumer Confidence Index fell to 109.8 this month – its lowest level since mid-2012 – and apparently below its historical average according to ANZ. They add that while New Zealand’s economy “still has points on the board,” it does seem to be trending “in a weaker direction.” FXStreet
PBOC injects another 120 billion yuan into the market.Hot on the heels of Tuesday’s 110 billion yuan loan injection, the People’s Bank of China is reportedly pumping another 120 billion yuan into the market today via seven-day reverse repo agreements, just like what it did on Tuesday. China’s inter-bank market is currently facing some serious issues after efforts to prop up the yuan drained the system of much-needed funds, effectively sending the overnight rate spiking upwards. Barron’s
September liftoff now unlikely. The Federal Reserve’s FOMC minutes reveal that Yellen et cie are still on the fence regarding a September rate hike, citing concerns over China’s current predicament as well as worries on inflation: “Some participants expressed the view that the incoming information had not yet provided grounds for reasonable confidence that inflation would move back to 2 percent over the medium term and that the inflation outlook thus might not soon meet one of the conditions established by the [Fed] for initiating a firming of policy.” NexChange / Federal Reserve
IMF won’t add yuan to basket yet. The IMF announced that it is freezing its benchmark currency basket that the yuan has so desperately been vying for until October 2016. The IMF board will vote in November whether the Chinese currency will be added to the Special Drawing Rights basket. Reuters
Turkey faces violence. A bomb killed eight soldiers and gunmen fired on police in Istanbul Wednesday. Two terrorists, as the governor’s office called them, were arrested outside the Dolmabahce palace. Militants from the Kurdistan Workers Party (PKK) were behind the bomb. Earlier in the day, Turkish planes destroyed PKK shelters near the Iraqi border. Reuters
ISIS beheads antiquities scholar. Khalid al-Asaad, the retired director of antiquities for Palmyra, was beheaded by ISIS Tuesday after being detained for weeks. The 83-year-old Asaad long guarded Palmyra, one of Syria’s greatest archaeological sites. Asaad was known to many as “Mr. Palmyra” because of his dedication to and restoration of the ruins. New York Times
You won’t believe this:
Wells Fargo emails top list of banking cheaters on Ashley Madison. 175 Wells Fargo employees allegedly used their work emails to sign up for a bit of adultery, nearly a hundred more than Bank of America’s 76, and 2.3 times more than Deutsche Bank’s 73. Sorry Goldman, this is one league table you won’t be besting. NexChange
Smoke and run. Marijuana users want you to know they aren’t lazy stoners. Events company 420 Games hosts road races and sporting events in a pot-friendly environment. The company doesn’t sell or distribute marijuana, so it can operate in states where recreational use of the drug is not legal. Cannabis use before races can help with focus and recovery, the group says. MarketWatch
Photo: nuomi