Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

Asia week ahead: US Q2 GDP, China PMIs and tariffs watch

Into the final week of August, Asia markets remain traversing between concerns of US-China trade and further growth deterioration.

Traders Source: Bloomberg

While we have yet to hear from Fed Powell, expect the contemplation of further growth slowdown to remain a key theme in the coming week.

Looming September 1 tariffs implementation

Asia markets were largely seen trading in a narrow range this week following a positive start to the week. President Donald Trump who met Apple Inc (All Sessions) CEO Steve Jobs over the weekend had noted that a ‘good case’ on tariffs had been made. In addition, an extension of the easing of Huawei sanctions had also contributed to the relief.

The above said, there appears to be little progress on the US-China trade issue from the surface with mixed rhetoric continuing through the rest of the week from both sides. The matter, as seen from the fluctuations and reactions within markets, remains a key concern going into the end of the month and ahead of the September 1 tariffs implementation deadline. Even though a partial delay had been seen, the kicking in of the fresh tariffs next Sunday is expected to lift US-China trade tensions by a notch. China had warned earlier in the month that retaliation will follow any further tariffs from the US, and this will likely induce greater caution within the market into the end of the week. One to watch.

Recession risks contemplation

This week had also seen the US 10-year to 2-year yield curve inversion symptoms return into the end of the week. Recession warnings had once again been bountiful, triggered as well by the poor preliminary August PMI readings out of advanced economies such as the US. The flash Markit manufacturing PMI had unexpected fallen into contraction territory at 49.9 against the consensus for an improvement to 50.5. While hopes are high ahead of Fed Powell’s Jackson Hole address for a 25 basis points cut in the September meeting, the deviation seen in the form of positive consumption performance leaves room for uncertainty.

With weeks to count towards the next Federal Reserve meeting, the performance in the data will be key. Watch the relatively backward looking second reading of US Q2 GDP on Thursday, alongside the likes of conference board consumer confidence index, durable goods and core PCE numbers among others. The current market consensus is looking for a downward revision in US Q2 GDP to 2.0% and the conference board consumer confidence index may soften to 130.0 from 135.7 in July.

Asia indicators watch

Asia markets will also find a string of indicators to watch in the coming week and a central bank monetary policy decision from South Korea due on Friday. Following the surprise cut in interest rates by Bank Indonesia this week, the market will be watching the Bank of Korea intently for any guidance on further moves. The current consensus suggests that the market is not looking for back-to-back cut rates next week despite the onslaught of geopolitical concerns plaguing this Asian tiger.

On data, China’s official PMI will also be released over the weekend. August’s manufacturing PMI is expected to soften further to 49.6 from 49.7 according to the market consensus and any disappointment may further weigh on regional markets in addition to the concern over tariffs. The local Singapore market meanwhile will see July’s industrial production release at the start of the week.


For more updates, do follow my twitter at @JPan_IG.


Have a good weekend!

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.

Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

Take a position on indices

Deal on the world’s major stock indices today.

  • Trade the lowest Wall Street spreads on the market
  • 1-point spread on the FTSE 100 and Germany 40
  • The only provider to offer 24-hour pricing

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Tuesday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.