Market Buzz: Chinese trading data inspires

Market Buzz: Chinese trading data inspires
Global stocks are expected to rebound on Thursday, driven mostly by positive news from Asian floors. Chinese trade figures suggested a slowdown in the world's second largest economy might be plateauing.

“Global markets will help increase the volume of purchases, and as a result, we can expect growth of markets at the opening which will last until the publication of US labor market data,” Andrey Shenk, an analyst at Investkafe said.

China's exports and imports both increased last month and beat expectations. It was also a strong recovery from June, when trade contracted for the first time since about 2009. Customs data showed that exports rose 5.1 percent from a year earlier, while imports leaped 10.9 percent.

The Central Bank of Russia meets tomorrow and a majority of analysts foresee the bankers leaving the refinancing rate steady at 8.25 percent, as they wait for inflation to drop below 6 percent before decreasing the benchmark.

“The central bank will play it safe and wait another month. Inflation will probably slow further in August, so they could make their move at the September meeting,” Vladimir Pantyushin, chief economist at Barclays Russia, told Bloomberg.

Russian markets could be encouraged by high Asian trading, but may also stall on the Central Bank’s decision to cut interest rates.

Russian equities dropped for a fourth consecutive day on commodities and metals. Norilsk Nickel dropped to its lowest level since December 2008 after JPMorgan Chase cut the stocks’ outlook.

The MICEX peaked before market close in Moscow, but through the evening session dropped 0.03 percent and will open at 1,372.47 points. The dollar-based RTS decreased on Moscow floors but overall gained 0.30 percent and will open at 1305.21.

Commodities should be strong market movers on Russian floors Thursday.

“Global markets will help increase the volume of purchases, and as a result, we can expect growth of markets at the opening which will last until the publication of US labor market data,” Andrey Shenk of Investkafe said.

Oil, Russia’s main export, dropped during trading hours, which brought down oil giants like Rosneft, Gazprom, and Lukoil, but has risen before market open, which could boost buying.

Oil prices jumped after the US reported its crude inventory fell by 1.3 barrels in the first week of August. WTI prices increased 0.51 percent to $104.90 per barrel and Brent rose 0.37 percent to $107.84.

With US monetary policy still undecided, stocks traded modestly on Wednesday. The Dow Jones decreased 0.31 percent, the S&P 500 dropped 0.38 percent, and the NASDAQ fell 0.32 percent. Gold increased on Fed uncertainty, a commodity often used as a hedge against the dollar in times of the currency’s unreliability.

European stocks may bounce back on Thursday on strong Chinese export data.

Amsterdam’s Euro Stoxx 50 increased 0.13 percent to 2,784.44, France’s CAC 40 gained 0.15 percent to 4,038.49, Germany’s DAX dropped 0.47 percent, despite positive manufacturing data, and London’s FTSE 100 Index dropped on the Bank of England’s promise to keep bank rates unchanged.

The eurozone will release its monthly bulletin, which is in line with the European Commission’s Bank economic outlook.

Asian stocks are picked up pace after the Bank of Japan decided to not to increase the already record stimulus of $723 billion by even more.

The Nikkei, volatile because of its size, has lost 0.32 percent to 13,781.32 and the Hong Kong Hang Seng Index increased 0.54 percent.

Australian unemployment data released today shows an unchanged figure for July of 5.7 percent. The Aussie dollar dropped against the greenback on the news, while the ASX 200 benchmark grew by 0.90 percent.