Global market wrap-up
증시 대담
It's time now for an in-depth look at the global markets this afternoon.
And for that I'm joined on the line by Dr. Hwang Sei-woon, research fellow at the Korea Capital Market Institute.
Dr. Hwang, thank you for coming on today.
Thank you.
Stocks on Wall Street started the week down on Tuesday, the S&P by about point-7 percent, the Nasdaq by more than one percent. Korean stocks, though, a little higher. What's the story today?
In Wall Street, stocks ended lower Tuesday after the world’s two largest economies began imposing new tariffs on each other’s goods. Weak manufacturing data also dented market sentiment. Stocks hit their session lows after the Institute for Supply Management said U.S. manufacturing activity contracted last month for the first time since early 2016. Investors loaded up on traditionally safer assets such as gold and long-dated Treasurys. Gold futures for December delivery rose more than 1%. The 30-year Treasury bond yield traded at 1.95% after hitting an all-time low last week.
Asian stocks rose on Wednesday though poor U.S. economic data stoked global recession fears and further soured investor sentiment already hurt by heightened trade war concerns. Korea’s KOSPI and Japan’s Nikkei gained 0.50% and 0.07% respectively. Hong Kong’s Hangseng also ended higher by 1.05%.
The Chinese currency is reaching lows against the U.S. dollar not seen since 2008. What effect does this have on the global economy and how long will this go on?
Global currencies have been pushed front-and-center as trade tensions between the US and China have escalated. Of particular interest to many watchers is the relative strength of the dollar versus the Chinese yuan, which sits at multi-year lows. The trade war has led to a historically weak Chinese currency and the impact would spread globally.
If Chinese Yuan depreciates further, it could end up weighing on the currencies of other emerging-market nations. For the rest of emerging market countries, Yuan weakening carries contagion risk and adds to an already unsettled environment. This implies that further depreciation of Yuan would put more downward pressures on emerging market currencies and the index tracking them.
The Yuan is expected to continue its depreciation as long as the trade disputes between the two countries intensifies. In other words, the Yuan has a natural tendency to weaken for a while to partially offset the impact from president Trump’s tariff imposition.
We saw yesterday that Korea's consumer inflation for August came to zero percent. What does that mean, and are we at risk of full-on deflation?
0% inflation shows that the domestic demand is really weak. South Korea's export-reliant economy is grappling with slowing exports and sluggish domestic consumption.
Korea is not in a situation of deflation yet. However, if the weak inflation continues, Korea’s economic growth momentum could be even worse.
Markets will view weaker inflation and economic growth data as factors t
It's time now for an in-depth look at the global markets this afternoon.
And for that I'm joined on the line by Dr. Hwang Sei-woon, research fellow at the Korea Capital Market Institute.
Dr. Hwang, thank you for coming on today.
Thank you.
Stocks on Wall Street started the week down on Tuesday, the S&P by about point-7 percent, the Nasdaq by more than one percent. Korean stocks, though, a little higher. What's the story today?
In Wall Street, stocks ended lower Tuesday after the world’s two largest economies began imposing new tariffs on each other’s goods. Weak manufacturing data also dented market sentiment. Stocks hit their session lows after the Institute for Supply Management said U.S. manufacturing activity contracted last month for the first time since early 2016. Investors loaded up on traditionally safer assets such as gold and long-dated Treasurys. Gold futures for December delivery rose more than 1%. The 30-year Treasury bond yield traded at 1.95% after hitting an all-time low last week.
Asian stocks rose on Wednesday though poor U.S. economic data stoked global recession fears and further soured investor sentiment already hurt by heightened trade war concerns. Korea’s KOSPI and Japan’s Nikkei gained 0.50% and 0.07% respectively. Hong Kong’s Hangseng also ended higher by 1.05%.
The Chinese currency is reaching lows against the U.S. dollar not seen since 2008. What effect does this have on the global economy and how long will this go on?
Global currencies have been pushed front-and-center as trade tensions between the US and China have escalated. Of particular interest to many watchers is the relative strength of the dollar versus the Chinese yuan, which sits at multi-year lows. The trade war has led to a historically weak Chinese currency and the impact would spread globally.
If Chinese Yuan depreciates further, it could end up weighing on the currencies of other emerging-market nations. For the rest of emerging market countries, Yuan weakening carries contagion risk and adds to an already unsettled environment. This implies that further depreciation of Yuan would put more downward pressures on emerging market currencies and the index tracking them.
The Yuan is expected to continue its depreciation as long as the trade disputes between the two countries intensifies. In other words, the Yuan has a natural tendency to weaken for a while to partially offset the impact from president Trump’s tariff imposition.
We saw yesterday that Korea's consumer inflation for August came to zero percent. What does that mean, and are we at risk of full-on deflation?
0% inflation shows that the domestic demand is really weak. South Korea's export-reliant economy is grappling with slowing exports and sluggish domestic consumption.
Korea is not in a situation of deflation yet. However, if the weak inflation continues, Korea’s economic growth momentum could be even worse.
Markets will view weaker inflation and economic growth data as factors t
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