Nomura cuts its GDP forecast for China – again
Nomura has cut its forecast for China’s full-year GDP to 2.7%, down again from the previous estimate of 2.8% set in August.
The new outlook is based on Nomura’s analysis which found that 12% of China’s GDP is affected by Covid controls on a weighted basis, up from 5.3% last week.
Several cities, including the Shenzhen Tech Center, have tightened Covid controls in recent weeks after reporting new local infections. Chengdu has also ordered people to stay at home while authorities conduct massive virus testing.
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China’s Exports For August Misses Forecasts; posts trade surplus above weak imports
Chinese exports rose 7.1% in August compared to the same period a year ago, official data shows, excluding estimates of 12.8% after rising 18% in July.
Imports rose 0.3%, short of the expected 1.1% increase in a Reuters poll and a 2.3% increase in July.
The country saw a trade surplus of $79.39 billion in August, driven by weaker import numbers, after seeing a record $101.26 billion in trade surplus in July.
Oil prices fall on expectations of further rate hikes and lower demand growth
Oil prices fell on Wednesday after more Covid restrictions in China and expectations of more rate hikes worldwide.
US West Texas Intermediate futures fell 1.45% to $85.62 a barrel, while Brent oil futures fell 1.14% to $91.77 a barrel, pushing earlier gains after the last OPEC+ meeting and the decision to to reduce production were wiped out.
A Reuters forecast expects WTI to extend its downward trend to $83.17 a barrel.
—Lee Ying Shan
CNBC Pro: Tensions between Russia and Europe could cause ‘bullish shock’ in oil markets
Oil and gas supplies will be boosted by the heightened tensions over Russian gas supplies to Europe, one analyst said.
Kenny Polcari, chief market strategist at SlateStone Wealth, told CNBC’s “Street Signs Asia” that investors should zoom in on major US energy names that are also good dividend payers.
One stock he mentioned is up 125% this year and he says there’s more “room to run.”
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— Weizhen Tan
Australian economy grows 0.9% in second quarter
Australia’s real GDP grew 0.9% in the second quarter, after rising 0.7% in the previous period, official data shows.
The Australian Bureau of Statistics said continued growth was supported by the first full quarter of reopened borders.
The data also showed that the Australian economy grew by 3.6% in the past year. The ABS said strong domestic demand and an increase in travel supported overall growth.
— Jihye Lee
CNBC Pro: This chip stock has convincingly beaten its competitors this year – and analysts think it could go higher
After years of crushing returns in the market, semiconductor stocks have sold heavily this year. But one stock has emerged from the carnage relatively unscathed. Not only has it outperformed its peers, it has beaten the S&P 500 by a country mile.
And analysts think the stock could go even higher.
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— Zavier Ongo
US Treasury yields hit highest level since mid-June
A bond sell-off has pushed US Treasury yields to their highest levels since mid-June as investors weigh what strong economic data means for the Federal Reserve’s future rate hikes.
The US 10-year yield rose by a whopping 3.353%, the highest level since June 16, when yields reached 3.495%. Yields are inverse to prices.
The US 30-year Treasury yield peaked at 3.484% and the US 5-year Treasury yield reached 3.334%, both the highest levels since mid-June.
The 2-year yield also rose to a daily high of 3.535%, but it is only the highest yield for the note since Friday.
– Carmen Reinicke