Morning Brief: Nikkei 225 and DAX rise while DXY makes modest recovery

Traders’ continued focus on the simmering tensions between the U.S. and China leads to a mixed start of August across Asia. In China, the Shanghai composite climbed by 1.20% while the Hang Seng index dipped by 0.70%.

In Japan, the Nikkei 225 index went up by 2.2% after fresh PMI data showed that the country’s manufacturing sector is making steady progress. Yahoo Japan, Alps Electric and Japan Tobacco are among today’s biggest movers. The shares of Seven & I Holdings, however, tumbled after the firm announced a $21 billion deal to acquire Speedway from Marathon Oil.

Meanwhile, in Australia, the S&P/ASX 200 barely moved despite last week’s strong PMI data from Australia and China. In Hong Kong, HSBC was the worst-performing stock after the bank reported a 62% drop in profits. As a result, its share price is down by more than 4% while Hang Seng Bank also dipped, by 3.6%.

Nikkei 225

DAX Index, FTSE 100 and Stoxx 50 rise

In Europe, futures are starting this month in the green as investors continue to anticipate growth across the region. Futures tied to the DAX index are up by 0.60% while those linked to the FTSE 100 rise by 0.25%. The overall Stoxx 50 index, which is made up of companies across Europe, is up by more than 0.65%. Stocks in the region will today move in a reaction to key earnings. For example, the FTSE 100 is likely to be affected by the weak earnings of HSBC. Other European firms to watch today are Heineken, Societe Generale, Natixis, Johnson Matthey and Land Securities.

DAX Index, CAC 40, Stoxx 50

Dow Jones futures fall as S&P 500 and Nasdaq futures rise

Futures tied to the Dow Jones are up by 0.20% while those tied to the S&P 500 and Nasdaq 100 have risen by 0.10% and 0.40%, respectively. There are three main catalysts moving US futures today. Firstly, Microsoft confirmed that it is pursuing a deal to acquire the U.S. assets of Tik Tok, the Chinese social media giant. The move followed an announcement by the Trump administration that it is looking into regulatory action or even an outright ban of the popular app.

Secondly, U.S. futures are reacting to the stimulus debate that is going on in the U.S. With unemployment benefits funds drying this week, there are concerns that Democrats and Republicans may not be able to reach a stimulus deal by this Friday.

Thirdly, the Dow Jones and other US futures are waiting for key corporate earnings from several U.S. companies. The notable companies that will release their financial results today are Berkshire Hathaway, AIA Group, Christian Dior and Global Payments.

Dow Jones

US dollar index (DXY) attempts to recover

The U.S. dollar index (DXY) had one of its worst months in July as the number of Coronavirus cases in the U.S. continued to jump. Today, the index has jumped by about 0.10%. This gain is largely because the dollar gained modestly against the euro, Pound sterling, and Japanese yen. Today, the index will react to global PMI numbers that will be released by Markit.

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US dollar index

US dollar index

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