Now that the US Federal Reserve Chair Janet Yellen's speech at Jackson Hole is done and dusted with, focus shifts to US August job data, which will strengthen or weaken the case for another rate hike as early as in September. Back home, Reserve Bank of India tabled its Annual Report 2015-16, which is the last one supervised by outgoing RBI governor Raghuram Rajan.
Below is the wrap-up of all this and more that is shaping the trade today:
- Focus shifts to US August job data: Investors now await US employment data later this week, which is likely to reinforce Fed official's recent hawkish messages. The employment report is expected to show an increase of 180,000 jobs in August, according to the median estimate of 89 economists polled by Reuters, below the better-than-expected 255,000 additions in July and 292,000 gains in June.
- Yuan bears pop up heads: As the US Federal Reserve signalled an increasing possibility of another rate hike as early as in September, Chinese currency yuan is seeing declines. A Bloomberg report said derivative markets are pointing to renewed bets on yuan depreciation. However, PBOC is expected to intervene to stabilise the currency ahead of the International Monetary Fund's decision on yuan's entry into the Special Drawing Rights on October 1.
- Japanese data beat forecasts: A raft of Japanese data, from unemployment to retail sales, mostly beat analysts' forecasts but did nothing to change expectations the Bank of Japan would eventually have to ease further. Japanese retail sales fell 0.2 per cent in July from a year earlier, while jobless rate hit a two-decade low, and household spending fell 0.5 per cent, less than expected.
- Oil market rebalancing could take until end 2017: Volatility in oil prices is here to stay, believe oil-company executives who gathered in Norway for a conference. The huge global oil oversupply that has weighed on prices for the past two years may not clear until the second half of 2017, they said.
- RBI's annual report: Inflation projections are still at the upper limit of Reserve Bank's target and the policy rate can be cut only if inflation eases, outgoing Governor Raghuram Rajan said in the foreword to RBI Annual Report 2015-16. Retail inflation shot up to nearly 2-year high of 6.07 per cent, while the one based on wholesale prices soared to a 23-month high of 3.55 per cent in July.
- Global markets gain: Asian markets excluding Japan bounced on Tuesday as investors continued to count on more policy stimulus elsewhere in the world. Hong Kong's Hang Seng rose 0.5 per cent, while China's Shanghai Composite index was trading with positive bias. Japan's Nikkei dipped 0.1 per cent. Overnight, Wall Street snapped three-day long losing streak with S&P 500 closing just 0.45 per cent below its record high set earlier this month, while Dow Jones industrial average rose 107.59 points, or 0.58 per cent, to 18,502.99.
(With inputs from Reuters)