SHANGHAI COMPOSITE FALLS 5.5% ON FRIDAY

​Following news of investigation by the Chinese regulators on the nation’s largest broking house Citic Securities sparked widespread sell off with the Shanghai composite index falling 5.5% on Friday to close at 3,436.

weak domestic q3 capex and construction data

​Private business capex fall was significantly higher than expected with Q3 spending declining by as much as 9.2% with mining sector expectedly contracting by 10.4% but unexpectedly services sector fell by 10% too. Construction activity fell as expected but again printed higher than market expectation with Q3 data falling by 3.6%.

weak final spring auction clearing rates in sydney 

​Sydney house auction clearance rates continued to be weak at 59% for the last weekend of spring sales but Melbourne was higher. The number of properties on the market in Sydney was high at over 1200 which partially contributed to the low clearance rates.

weekly market data

Australia Cash rate
Australia 90 day bank bill
Australia 10 y bond
US 10y Govt bond
AUD/USD
AUD/EUR
AUD/JPY
AUD/CNY
ASX 200
S&P 500
Dow Jones
Shanghai Composite
Brent Oil (USD per BBL)
Gold Spot (USD per oz)

This week
2.00
2.27
2.85
2.22
0.7227
0.6813
88.60
4.6203
5202
2090
17798
3436
41.71
1056

Last week
2.00
2.245
2.92
2.2623
0.7194
0.6711
88.40
4.5906
5256
2089
17823
3620
44.66
1075.83

OUTLOOK FOR NEXT WEEK

​The RBA Governor Glenn Stevens indicated that a period of stability is more beneficial for the domestic economy as it approaches the December holiday season. With indications for strong consumer sentiment on holiday season spending, it is highly unlikely that the RBA is looking at a rate cut when it meets on Tuesday. The Q3 GDP data will be published on Wednesday which would be one to watch.

Globally, the US payroll data to be published on Friday is likely to print strong, leading to a December rate rise decision by Governor Yellen. Draghi at the ECB is likely to confirm further QE boost to shore up the EU economy at the ECB policy meeting on Thursday.