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Chinese trade data weigh on Asia stocks

Tuesday 03.40 BST

What you need to know

  • Renminbi hits 10-month high
  • Dollar edges lower
  • Iron ore continues rally

Asia Pacific equities dipped on Tuesday as investors digested trade data from China showing exports and imports for July came in below estimates.

Hot topic

Australian banks dragged on the S&P/ASX 200 after Commonwealth Bank of Australia said it would cut the bonuses of senior executives in response to money laundering allegations. CBA shares fell as much as 1.1 per cent on the news. The S&P/ASX was down 0.8 per cent with the financials sector losing 0.6 per cent.

Japan’s Topix index was 0.4 per cent lower, weighed down by a 1.2 per cent fall for SoftBank following the release of the company’s first-quarter earnings.

Hong Kong’s Hang Seng was flat as a 0.4 per cent fall for the financials sector offset a 1.3 per cent rise for information technology stocks and 1.5 per cent increase for consumer discretionary stocks. Carmaker Geely was the best performer on the index, gaining as much as 5.9 per cent after the company reported an 89 per cent year-on-year increase in sales volumes for the first seven months of 2017.

Chinese exports grew 11.2 per cent year-on-year in July in renminbi terms, against economists’ estimates compiled by Bloomberg of a 14.8 per cent increase. Imports grew 14.7 per cent against estimates of 22.6 per cent growth.

Forex

The dollar index, a measure of the greenback against a basket of its peers, was 0.2 per cent weaker at 93.282.

The renminbi firmed to a 10-month high with the onshore renminbi pushing to Rmb6.7079 per dollar after the Chinese central bank fixed the currency slightly firmer to the greenback. This came after data released Monday showed the country had fixed its capital outflows problem, with forex reserves rising in China for a sixth straight month in July.

Survey data from National Australia Bank showing improved business confidence helped boost the Australian dollar to $0.7929.

The Japanese yen was 0.1 per cent stronger against the dollar at ¥110.61.

Fixed income

The yield on the 10-year US Treasury, which moves inversely to price, was down 0.5 basis points at 2.257 per cent. The yield on 10-year Japanese government bonds was flat at 0.062 per cent, while that for Australian sovereign bonds was up 1.2bp at 2.628 per cent.

Commodities

Oil prices edged lower ahead of the conclusion of a meeting of Opec and non-Opec producers in Abu Dhabi to discuss compliance with agreed output cuts. Brent crude was 0.4 per cent lower at $52.15 a barrel and US marker West Texas Intermediate was down by the same amount at $49.21 a barrel.

Gold was 0.2 per cent higher at $1,260.45 an ounce.

Iron ore on China’s Dalian Commodity Exchange rose as much as 1.3 per cent to Rmb603.5 a tonne before easing to Rmb601 a tonne.

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