The Japanese yen weakens further, approaching 145
The Japanese yen weakened further to 144.35, the weakest since mid-1998 – as the US dollar index strengthened, reached a new high of 24 years against the Japanese currency.
The offshore Chinese yuan also weakened to 6.99, approaching the 7 mark, following weaker than expected trade data.
The South Korean won also weakened, surpassing the 1,380 level for the first time in more than 13 years.
Nomura cuts Chinese GDP forecast again
Nomura lowered its forecast for China’s full-year GDP to 2.7%, another downward revision from its previous estimate of 2.8% set in August.
The new outlook is based on Nomura’s analysis which found that 12% of China’s GDP is affected by Covid controls on a weighted basis, up from 5.3% last week.
Several cities, including tech hub Shenzhen, have tightened Covid controls in recent weeks after reporting new local infections. Chengdu also ordered people to stay at home while authorities conduct mass virus testing.
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China’s exports for the month of August are below forecasts; shows a trade surplus on low imports
China exports rose 7.1% in August compared to the same period a year ago, according to official data, estimates fell by 12.8% after an 18% rise in July.
Imports rose 0.3%, less than the 1.1% gain predicted in a Reuters poll and the 2.3% increase in July.
The country recorded a trade surplus of $79.39 billion in August, due to lower imports, after posting a record trade surplus of $101.26 billion in July.
Oil prices fall on expectations of further rate hikes and weaker demand growth
Oil prices tear down on Wednesday following new Covid restrictions in China and expectations of further interest rate hikes around the world.
The United States West Texas Intermediate futures fell 1.45% to settle at $85.62 a barrel, while Crude Brent futures slid 1.14% to $91.77 a barrel, erasing earlier gains following the latest OPEC+ meeting and its decision to cut production.
A Reuters forecast expects WTI to extend its downtrend to $83.17 a barrel.
—Lee Ying Shan
CNBC Pro: Tensions between Russia and Europe could cause a ‘bullish shock’ in oil markets
Oil and gas inventories are expected to be boosted by heightened tensions surrounding Russian gas supplies to Europe, an analyst said.
Kenny Polcari, chief market strategist at SlateStone Wealth, told CNBC’s “Street Signs Asia” that investors should focus on big U.S. energy names that are also good dividend payers.
One stock he named is up 125% this year, and he says there’s more “wiggle room.”
Australia’s economy grows 0.9% in the second quarter
Australia’s real GDP rose 0.9% in the second quarter after rising 0.7% in the previous period, official data showed.
The The Australian Bureau of Statistics said continued growth was supported by the first full quarter of border reopenings.
The data also showed that Australia’s economy grew by 3.6% over the past year. The ABS said strong domestic demand along with an increase in travel supported overall growth.
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After years of outperforming the market, semiconductor stocks have sold off strongly this year. But one stock emerged relatively unscathed from the market carnage. Not only did it outperform its peers, it beat the S&P 500 by a country mile.
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— Zavier Ong
US Treasury yields at highest since mid-June
A bond sell-off has propelled U.S. Treasury yields to their highest levels since mid-June as investors weigh what strong economic data means for future Federal Reserve rate hikes.
The 10-year US Treasury yield rose 3.353%, the highest level since June 16, when the yield hit 3.495%. Returns are inverse to prices.
The 30-year US Treasury yield hit a high of 3.484% and the 5-year US Treasury yield hit 3.334%, also the two highest levels seen since mid-June.
The 2-year yield also hit a daily high of 3.535%, but that’s only the highest yield for the note since Friday.