Chinese Falling Exports Put Aussie, Kiwi Dollars on Back Foot

---

The currencies of Australia and New Zealand retreated following gains of at least 1 percent Friday, after disappointing trade data in China deepened concern that demand for commodities will weaken in their biggest export market.

Australia’s dollar had the steepest decline among major currencies against the greenback on Monday, after reports in China over the weekend showed exports shrank five times more than economists estimated and producer prices fell by the most in almost six years. The Aussie and kiwi had dropped last month as commodities plunged and bets increased that the Federal Reserve will raise interest rates next month.

Australia’s dollar declined 0.3 percent to 73.96 U.S. cents as of 11:42 a.m. in Tokyo on Monday. The currency rallied 1.5 percent last week after hitting a six-year low of 72.35 on July 31. New Zealand’s currency depreciated 0.1 percent to 66.17 cents, after advancing 1.1 percent on Friday.

China’s overseas shipments fell 8.3 percent from a year earlier in dollar terms, the customs administration said Aug. 8. The reading was well below the estimate of a 1.5 percent decline in a Bloomberg survey. The country’s producer-price index fell 5.4 percent year-on-year last month, the National Bureau of Statistics said the following day.

Source: Bloomberg

Gold slips as upbeat US jobs data keeps door open to Sept Fed hike

---

Gold opened the week down on Monday, trading close to a 5-1/2-year low, as the U.S. dollar firmed after solid U.S. job gains in July suggested the Federal Reserve could raise interest rates as early as next month.

Spot gold had dropped 0.2 percent to $1,090.25 an ounce by 0041 GMT. The metal fell for a seventh week in a row last week, its longest such retreat since 1999, having struggled to pull away from a 5-1/2-year trough of $1,077 reached during a late rout in July.

U.S. gold for December delivery fell 0.4 percent to $1,089.70 an ounce.

U.S. nonfarm payrolls increased 215,000 in July and wages rebounded after a surprise stall in the prior month, signs of an improving economy that opened the door wider to a U.S. interest rate increase next month. The unemployment rate held at a seven-year low of 5.3 percent.

Payrolls data for May and June was revised to show 14,000 more jobs created than previously reported, and analysts say the report "easily clears the hurdle needed to keep the Fed on track for a September rate hike".

A looming U.S. rate rise, the first since 2006, had weighed on non-interest yielding gold, pulling more funds to the dollar.

Top gold consumer China is under growing pressure to further stimulate its economy after disappointing data over the weekend showed another heavy fall in factory-gate prices and a surprise slump in exports.

China's foreign exchange reserves, the world's largest, fell by $42.5 billion in July to $3.65 trillion, the sharpest monthly drop since March amid signs of capital outflows. The value of China's gold reserves dropped to $59.24 billion from $62.4 billion.

The decline in holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, continued, hitting 21.47 million ounces on Friday, the lowest since September 2008.

The South African Chamber of Mines said all unions representing workers in the gold sector have rejected the final wage increase offer from bullion producers, setting the stage for protracted negotiations.

Source: Reuters

China Stocks Rise as Merger Speculation Offsets Economic Data

---

China’s stocks climbed for a second day as speculation the government will accelerate mergers among state-owned enterprises overshadowed worse-than expected economic data.

The Shanghai Composite Index climbed 1.8 percent to 3,812.02 at 10:13 a.m. local time. China is considering combining China Shipping Group and Cosco Group, its two major shipping companies, according to people familiar with the matter. Producer prices fell in July to the lowest level since 2009 and exports dropped more than expected, data over the weekend showed. The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong slid 0.7 percent.

The CSI 300 Index rose 2 percent. The Hang Seng Index slipped 0.7 percent. Trading volumes in the Shanghai Composite were 15 percent lower than the 30-day average for this time of day.

The Shanghai gauge has rebounded 8.7 percent since the July low as authorities took unprecedented measures to shore up markets including banning stake disposals by major shareholders, suspending initial public offerings and compelling state-run institutions to support the market with equity purchases.

Source: Bloomberg

China Stock Futures Rise on Prospects for SOE Reform, Stimulus

---

China’s stock-index futures rose on prospects for mergers in the shipping industry and as weak economic data bolstered speculation the government will add to stimulus.

Futures on the CSI 300 Index expiring in August gained 1.3 percent to 3,903 as of 9:17 a.m. local time. China is considering a merger of China Shipping Group and COSCO Group, its two major shipping companies, according to people familiar with the matter. Producer prices fell in July to the lowest level since 2009 and exports dropped more than expected, according to economic data released over the weekend.

The Shanghai Composite Index climbed 2.3 percent to 3,744.21 on Friday. The CSI 300 Index rose 2 percent. Hong Kong’s Hang Seng China Enterprises Index advanced 1.2 percent. The Hang Seng Index gained 0.7 percent. The Bloomberg China-US Equity Index, the measure of the most-traded U.S.-listed Chinese companies, retreated 0.6 percent in New York.

The Shanghai gauge has rebounded 6.8 percent since the July low as authorities took unprecedented measures to shore up markets including banning stake disposals by major shareholders, suspending initial public offerings and compelling state-run institutions to support the market with equity purchases.

The producer-price index fell 5.4 percent year on year last month, according to the National Bureau of Statistics. The drop, which exceeded the median estimate for a 5 percent decrease, extends declines to 41 straight months. The consumer-price index increased 1.6 percent, as a surge in pork prices offset sluggish growth in the cost of non-food items.

Source: Bloomberg

Japanese Topix Falls First Time in Nine Days Amid Weak China Data

---

Japanese stocks fell, with the Topix index heading for its first loss in nine days, as weaker-than-expected Chinese economic data weighed on investor demand for firms that rely on China for sales.

The Topix index slipped 0.3 percent to 1,673.44 as of 9:01 a.m. in Tokyo, falling for the first time since July 28, as all but five of its 33 industry groups declined. The Nikkei 225 Stock Average dropped 0.5 percent to 20,624.01. China at the weekend reported a bigger-than-expected slide in exports and the steepest slump in producer prices since 2009.

Shipments from China shrank 8.3 percent in July, more than five times the drop projected by analysts, stoking concern about growth in Asia’s largest economy. Imports declined 8.1 percent, compared with expectations for a 8 percent retreat. The producer-price index fell 5.4 percent, the biggest slide since October 2009.

Futures on the Standard & Poor’s 500 Index added less than 0.1 percent after the underlying measure fell 0.3 percent on Friday.

U.S. employers added 215,000 workers last month, slightly below economist estimates for a gain of 225,000, a government report showed on Friday. Average hourly earnings climbed a less-than-forecast 2.1 percent from a year earlier, indicating sluggish momentum in wage growth and weaker outlook for inflation.

Japanese data Monday showed the nation’s current account surplus in June was 558.6 billion yen compared with a 363.9 billion yen deficit last year. Economists had been expecting a surplus of 785.9 billion yen.

Source: Bloomberg