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- US broader indices close lower on the day. Nasdaq 100 closes marginally higher
Summary:
- Oil remains underpinned after Monday’s gains, with President Trump vowing to hit Iran hard in response to its retaliation, and reports of a Saudi VLCC halted after being struck by projectiles in the Strait of Hormuz.
- US Army Secretary Dan Driscoll has resigned after months of tension with Defense Secretary Pete Hegseth, according to the Wall Street Journal.
- Gold is little changed below USD 4,450/oz following a quiet prior session and amid recent upside in yields.
- China’s RatingDog Manufacturing PMI rose to a two-month high of 51.5 in August from 50.9 in July, with new orders and exports accelerating, a ninth straight month of expansion and a positive signal for AUD as a China proxy.
- Japan’s S&P Global Manufacturing PMI rose to 54.9 in August from 54.5 in July, an eighth straight month of improvement, with new orders growing at their fastest pace in over eight and a half years on AI and semiconductor demand, though this missed the 55.1 forecast.
- South Korea’s S&P Global Manufacturing PMI eased to 52.3 in August from 53.1 previously.
- Australia’s net exports contributed 0.1 percentage points to Q2 GDP, following separate data showing underlying government demand and inventories contributed 0.33 percentage points to Q2 growth.
- Treasury Secretary Bessent said he believes Japan will act to strengthen the yen and that markets are pricing in a BOJ hike, after meeting BOJ Governor Ueda and Japan’s Finance Minister Katayama at the G20; USDJPY stood near 159.75, close to the 160 level associated with intervention risk.
- Katayama separately confirmed with Bessent that orderly yen and FX rates are crucial for global financial stability and that joint intervention remains significant, while declining to comment on current yen levels.
- The US dollar held slightly higher against most major currencies.
- A new report showed the scale of China’s state-backed equity market support, with SASAC and Chengtong raising A-share holdings by more than 60 billion yuan in 2026, part of a wider buyback push covering 1,051 listed companies with proposed buybacks exceeding 220 billion yuan, according to the China Association for Public Companies.
- The Nikkei 225 traded off earlier lows and briefly turned positive, with headwinds from higher yields. The KOSPI declined mildly amid light newsflow and indecisive performance among tech heavyweights. The Hang Seng fell around 1% while the Shanghai Composite rose 0.2%, with mainland shares cushioned by the stronger than expected China PMI data.
Middle East news flow was relatively light through the session, though oil prices remained underpinned after Monday’s gains, when a US strike on Iranian rocket launchers and a subsequent Iranian retaliation drove crude higher. President Trump has vowed to respond forcefully to Iran’s retaliation, and further support came from reports that a Saudi VLCC was halted after being struck by projectiles in the Strait of Hormuz, extending the pattern of tanker incidents in the waterway.
Separately, US Army Secretary Dan Driscoll has resigned following months of tension with Defense Secretary Pete Hegseth, according to the Wall Street Journal.
Gold was little changed below the USD 4,450 an ounce level, following an uneventful prior session and alongside the recent upside in bond yields.
It was a busier day for economic data, with the focus on China’s private sector manufacturing survey. The RatingDog China General Manufacturing PMI rose to a two-month high of 51.5 in August from 50.9 in July, with new orders and export growth both accelerating. The reading marked a ninth consecutive month of expansion and was seen as a positive signal for the Australian dollar given its role as a China proxy currency.
In Japan, the S&P Global Manufacturing PMI rose to 54.9 in August from 54.5 in July, an eighth consecutive month of improvement, with new orders expanding at their fastest pace in more than eight and a half years on strong AI and semiconductor related demand, though the reading fell short of the 55.1 forecast. South Korea’s equivalent survey eased to 52.3 in August from 53.1 previously.
In Australia, net exports contributed 0.1 percentage points to second quarter GDP, following data released a day earlier showing underlying government demand and inventories contributed a further 0.33 percentage points to growth over the same period.
On the currency side, Treasury Secretary Scott Bessent said he believes Japan will act to strengthen the yen and that markets are pricing in a Bank of Japan rate hike, following meetings with BOJ Governor Kazuo Ueda and Japan’s Finance Minister Satsuki Katayama at the G20 in Asheville. USDJPY stood near 159.75, close to the 160 level that has previously been associated with a heightened risk of intervention. Katayama separately confirmed with Bessent that orderly yen and broader FX rates are crucial for the stability of global financial markets, and that the two sides share an understanding on the significance of joint intervention, while declining to comment on whether she considers current yen levels to be in order. The US dollar held slightly higher against most major currencies through the session.
A new report also highlighted the scale of state-backed support flowing into Chinese equities, with the State-owned Assets Supervision and Administration Commission and China Chengtong Holdings Group having raised their combined A-share holdings by more than 60 billion yuan so far in 2026. That figure sits within a broader buyback push covering 1,051 listed companies with proposed buybacks exceeding 220 billion yuan, according to a report from the China Association for Public Companies.
Regional equity markets were mixed. The Nikkei 225 traded off its earlier lows and briefly turned positive, despite headwinds from higher yields. The KOSPI declined mildly amid light news flow and indecisive performance among the index’s tech heavyweights. In Hong Kong and mainland China, the Hang Seng fell around 1% while the Shanghai Composite rose 0.2%, with mainland shares cushioned by the stronger than expected Chinese manufacturing PMI data released earlier in the session.
This article was written by Eamonn Sheridan at investinglive.com.
