After being solidly ignored for weeks, suddenly the Scottish independence referendum is all anyone can talk about, manifesting itself in a plunge in the GBPUSD which ha slide over 100 pips in the past 24 hours, adding to the slide over the past week, and is now just above 1.61, the lowest since November 2013. In fact, the collapse of the unionist momentum has managed to push back overnight news from Ukraine, major Russian sanction escalations, Japan GDP as well as global trade data on the back burner. Speaking of global trade, with both China and Germany reporting a record trade surplus overnight, with the US trade deficit declining recently, and with not a single country in the past several month reporting of an increase in imports, one wonders just which planet in the solar system (or beyond) the world, which once again finds itself in a magical global trade surplus position, is exporting to?
There is a fairly quiet session overnight with most of North Asia out on Mid-Autumn Festival. Markets are closed in China and Korea overnight with the latter only reopening on Thursday. In Hong Kong, the Hang Seng is down about 0.2%. China’s trade data and the second revision to Japan’s GDP are the main data releases overnight. On China, the trade surplus widened to a record $49.84bn in August (expectations of US$40bn). This was helped by a 9.4% yoy rise in exports (expectations 9.0% yoy) although imports surprisingly contracted by -2.4% yoy (consensus 3.0% yoy). In Japan, its second quarter GDP contraction was revised down further to -7.1% from its preliminary estimates of -6.8% on the back of the sales tax hike in April. Away from equities, Asian credit spreads are modestly tighter with the 10yr Treasury yield a basis point lower at just shy of 2.44%. Asian stocks little changed with the ASX underperforming. MSCI Asia Pacific up 0% to 148.5. Nikkei 225 up 0.2%, Hang Seng down 0.2%, Kospi closed, Shanghai Composite closed, ASX down 0.4%, Sensex up 1.1%. 6 out of 10 sectors rise with telcos, industrials outperforming and consumer, health care underperforming.
This post was published at Zero Hedge on 09/08/2014.