- Asian stocks fall as US-China tensions rise
- Disappointing US data yesterday has encourages a risk-off mood
- UK retail sales and PMI came in much better versus estimates
Asian equities traded lower overnight following an escalation in US vs China political tensions.
In retaliation to the US closure of the Chinese consulate in Houston, China has asked the US to close its consulate in Chengdu.
This is seen as a like-for-like retaliation in response to the escalation by the US earlier in the week. China has given no timeline for the Chengdu closure as of yet.
US Initial Jobless Claims were worse than expected yesterday.
Markets were expecting 1,300k in line with last week, but numbers unexpectedly jumped to 1,416k.
This is said to be due to the delayed emergence of New York City which has experienced outbreaks of the virus and consequently delayed a full re opening of the economy.
UK Chancellor Rishi Sunak directed an extra £3.7bn of corona virus-relief funding to Scotland, Northern Ireland and Wales yesterday.
The new stimulus comes as recent polls suggest that Scots would support independence if put to a vote. However the question of how Sunak will make this money back will be an interesting one, increasing Tax in an environment where consumers and businesses are recovering, doesn’t seem feasible and hiking interest rates is out of the question.
UK Retail Sales data which came out better than expected at 13.9% m/m (expectations were for 8.3% m/m).
Though bear in mind sales are still down year-on-year by 1.6%, this is better than the market expected – consensus expectations were for a 5.9% decline y/y.
UK manufacturing PMI came in at 53.6 vs 52 and Services PMI were recorded at 56.6 vs 51.1. Both recordings are a positive for the UK economy, a PMI figure about 50 shows economic growth whilst a number below 50 is indicative of an economy in contraction.