Morning Brief: Asian Stocks Retreat on South China Sea Tensions

Summary:

Asian stocks are trading slightly lower on Thursday ahead of Jerome Powell speech in Jackson Hole. Asian indices hover close to six-month highs as the rally

Asian stocks are trading slightly lower on Thursday ahead of Jerome Powell speech in Jackson Hole. Asian indices hover close to six-month highs as the rally in Wall Street continues with Nasdaq and S&P 500 making another all-time high. Positive news on the coronavirus treatment has boosted equities and especially the technology sector to extreme evaluations.

All eyes will be today on Jerome Powell speech in Jackson Hole. Analysts expect that the Fed will increase the inflation target, which will translate to lower rates and weaker USD.

In our economic calendar, the initial jobless claims are expected to decline back to one million after the previous week jump. The U.S. Gross Domestic Product (GDP) in the second quarter revision is likely to improve from the 32.9% contraction that reported.

Tensions between China and the USA were rising after the U.S. blacklisted 24 Chinese companies and some Chinese citizens, while China launched ballistic missiles in the South China Sea. The news harmed Japanese stocks. Nikkei 225 ended 0.35% lower at 23,208, as investors await a press conference tomorrow from Prime Minister Abe on the state of his health.

In Australia, the ASX 200 index gave up most of the gains and now is 0.16% at 6,126 before the closing bell. The materials and healthcare sector are among the top performers. On the other hand, energy and utilities are under selling pressure.

Gold Volatility Rise On Confusing Signals

Gold is trading lower today after a volatile session yesterday. The gold price was trading in 50 dollar trading range after it managed to rebound from the lows at 1,903 up to 1,956—risk-on sentiment in markets pressures gold and the safe-haven assets. Better durable goods orders shifted investors attention to more risky assets such as stocks. However, the news that China launched missiles in the South China Sea sends investors back to gold. Gold price is 0.65% lower at $1,942 while the silver price is 0.51% lower at $27.26.

Hurricane Laura Approach Texas – Crude Oil Prices Steady At Five-Month Highs

Hurricane Laura is developing into Category 5 and is expected to hit Texas and Louisiana. Crude oil rigs and production facilities are shut down, boosting oil prices to five-month highs. Brent crude oil is 0.12% lower at $45.75. The WTI oil futures are 0.11% lower at $43.35.