News

Indonesian central bank governor: The Federal Reserve may keep interest rates high for a longer period of time.

Rich Privorotsky, head of trading at Goldman Sachs' Delta-one desk, believes that current interest rate pressures are increasingly resembling a bond supply issue. Recent US data has weakened, causing short-term interest rates to fall, but long-term rates remain under pressure because the market needs to absorb a massive sovereign deficit and potentially over $1 trillion in annual AI capital expenditures, the latter increasingly financed through the debt market. His assessment is that the market needs higher real interest rates to absorb such a large bond supply. This also means that even if economic data continues to slow, long-term yields may not decline in tandem, and the yield curve may continue to show a divergence: short-term yields driven by data and central banks, while long-term yields are constrained by fiscal and financing supply. Privorotsky even proposes a more extreme scenario: if long-term yields continue to lose their anchor, the Federal Reserve may need to maintain tightening even with weak economic data to flatten the curve and stabilize long-term interest rate expectations. For the market, the biggest medium-term risk variable remains long-term interest rates, rather than expectations of a single rate cut.

Hungarian Prime Minister Majol: Dr. Baka András will assume the presidency of Hungary starting tomorrow.

European Central Bank President Christine Lagarde: Europe cannot miss the artificial intelligence revolution.

South Korean Foreign Minister: Intelligence sharing with the United States has been restored.

As the South Korean stock market continues to experience sharp fluctuations, retail investors are gradually withdrawing from the domestic market and actively buying ETFs that track major US indices. Koscom's ETF Check data from the 19th shows that among ETFs listed in South Korea, the TIGER US S&P 500 attracted the most inflows over the past month, with net inflows reaching 1.12 trillion won (approximately US$807 million). Following closely behind was the KODEX US Nasdaq 100, which attracted 707.3 billion won, ranking third; the TIGER US Nasdaq 100 attracted 528.6 billion won, ranking fifth; and the KODEX US S&P 500 attracted 437.3 billion won, ranking seventh. In other words, four of the top seven most actively traded ETFs track major US stock indices. Retail investors also showed remarkable buying power. Over the past month, the top three ETFs with the highest net retail investor purchases were the TIGER S&P 500 (611.9 billion won), the KODEX Nasdaq 100 (418.4 billion won), and the KODEX S&P 500 (337 billion won). The TIGER Nasdaq 100 also attracted 287.4 billion won in retail investor funds, ranking fifth.

SK Hynix (SKHY.O) shares rose more than 4% in overnight trading on the US stock market, after falling more than 3% earlier, after the company announced formal approval for a 40 trillion won share buyback program.

ECB Governing Council member Rehn: Wage growth and the wage outlook remain moderate, with no clear signs of a second wave.

SK Hynix shares surged over 2% in overnight trading on the US stock market, after falling over 3% earlier. The company announced it will repurchase 40 trillion won worth of shares, which will be used for cancellation and to reward shareholders.

The Russian Ministry of Defense stated: "We struck fuel storage tanks at the port of Chernomorsk in Ukraine and a military cargo ship in the Black Sea."

Japan's Ministry of Foreign Affairs: The US sanctions against the International Criminal Court and its President Tomoko Akane are "deeply regrettable."

The governor of Kherson Oblast in Ukraine said that a Russian drone attack on a bus killed four people.

Switzerland's industrial output grew at an annualized rate of 5.5% in the second quarter, revised from -7.10% to -7.6% in the previous quarter.

Australia's S&P/ASX 200 index closed down 23.40 points, or 0.26%, at 9046.60 on Wednesday, August 19.

The governor of Bashkortostan, Russia, said: "There was a fire at the oil refinery, but the damage was minor. We will resume production within a few days."

Market news: Russia claims it hit a military cargo ship in the Black Sea.

The local governor said that oil refinery infrastructure in Russia's Bashkortostan region was damaged in a Ukrainian drone attack.

Chairman of the Securities and Exchange Commission of India: Delisting regulations and rules for small companies' initial public offerings are currently under review.

Euro Stoxx 50 futures fell 0.18%, German DAX futures fell 0.16%, French CAC 40 futures fell 0.12%, and UK FTSE futures fell 0.17%.

The UK's July retail price index rose 0.6% month-on-month, below the expected 0.80% and the previous reading of 0.30%.