Japan's Nikkei (+0.1%)
China's Shanghai Composite (-0.3%)
South Korean Kospi (-1.4%)
Hong Kong Hang Seng (-1.1%)
Australian ASX (+0.5%)
The main things
The next trading week goes to the players' piggy bank for promotion. The US market does not get tired of rewriting the highs, the volatility of the indices is still low, overbought is ignored. This indicates the lack of a proper driver for the fall of risky instruments.
The raging inflation and the recovery of the US labor market, which act as benchmarks for the Fed's monetary course, could have been the incentives for the index reversal, but price pressure weakened in July, and the spread of new strains of the virus restrains the regulator from sudden movements.
Commodity assets are stabilizing after a significant dip in the first half of the week. Oil futures are trading near $71 per barrel of Brent. Consolidation above the level will give strength to the bulls in the short term, but it is unlikely to change the medium-term trajectory of commodities.
In the Asia-Pacific markets, there is a significant discrepancy in the dynamics of country stock indices.
China's Shanghai Composite is down by a third of a percent, and the Hang Seng index of autonomous Hong Kong is falling by more than a percent. Nevertheless, the market panic at the end of August has been largely stopped, and the composite benchmark of Chinese shares is preparing to close the week above the bar of 3,500 p., which is somewhat surprising — macro statistics give an unambiguous conclusion about the slowdown of the Chinese economy, and regulatory risks, judging by the "Plan 2025" project, remain.
The NBK stands on the protection of the market and the expectations of expanding the liquidity of the financial system, but the statistics of the banking sector indicate the unwillingness of credit institutions to invest in a stagnant economy experiencing a natural lull after the rapid post-pandemic recovery of 2020-early 2021.
According to the set of introductory data, the Shanghai Composite's July drawdown is rather technical in nature — the bears are ready to return at any moment.
South Korea's Kospi is falling by 1.5% amid sales of the high-tech sector, and in particular a sharp decline in the index heavyweight Samsung (-4%). The composite benchmark of the stock market fell to the levels of the end of May.
Of course, the market today is dominated by an internal story caused by the UDO of the vice president of the corporation, but also macrostatistics from the labor market, signaling an increase in the probability of the end of the Korean soft monetary cycle, and China's plans to tighten regulation of the high-tech sector, influence the buyers' positions.
Thus, the multidirectional dynamics of the Asia-Pacific markets today does not give a clear signal for the opening of European platforms. However, the overbought risk capital markets still indicate a temporary pause in the rise of European benchmarks on Friday.
A characteristic feature of a strong trend, in our case an upward one, is the low responsiveness of the market to the negative and the rapid wagering of the positive. If data on July fading inflation was released on Thursday and the stock market cheered up, because it regarded the fact of slowing price pressure as a factor in the continuation of the Fed's monetary policy, then yesterday's metrics on production inflation, reflecting a further rise in prices, were simply ignored by investors.
As a result, the trading week ends with another victory of the bulls, and the S&P 500 broad market index marked another peak above 4460 p. The next landmark, unless something unexpected happens, is the round mark of 4500 p.
In the morning hours of Friday, the futures for the index of the same name are running above 4450 p., and the VIX volatility indicator fell to the lows of the year, which again refuses to support players to lower the overheated stock market.
The main marker for the Fed is still the situation on the labor market, because the authorities judge the recovery of consumer activity in the country by the dynamics of employment.
Yesterday's data on the number of applications for unemployment benefits again reflected an improvement: the number of people in need of state support fell to 375 thousand, this is very close to the record June lows of 368 thousand. from the post-pandemic period. The risk now is the third wave of the virus, so investors shrugged off the positive, threatening to intensify conversations about curtailing the quantitative programs of the Federal Reserve.
Thus, American bulls continue to get richer, and bears are forced to wait for the actual steps of the Fed to prevent the economy from overheating. Only a slowdown in the pumping of the market with liquidity can shake the positions of players to increase, but this is not happening yet. From a technical point of view, it will be possible to talk about the activation of bears only after the return of the S&P 500 under 4430 p.
Oil prices are declining at Friday's trading within a percentage. By the standards of the volatility of the instrument, such a deviation is insignificant. October Brent futures — $70.7.
In general, the trading week will be remembered by the participants of the commodity market with an extended amplitude of fluctuations in oil prices. As expected, the contracts managed to register at the lows of the month, under $68 per barrel, and rebound to $71.
The factors of influence are the same - issues of OPEC+ quotas, the dynamics of the incidence of mutating coronavirus, trends in macro indicators of the Asia-Pacific region and inflation in the States.
The introductory conditions of the energy market allow for the preservation of high volatility of exchange-traded instruments, with an attempt to further rebound futures, nevertheless, the medium-term trajectory has been chosen - the attenuation of pro-inflationary factors is likely to intensify, which will continue to dominate the commodities market.