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Markets Update: Apple's After-Hours Slump Fails to Derail Asia-Pacific Stock Rally; China Largely Shrugs Off Weak PMI; US NFPs in Focus.
Economic Calendar
Global Markets Roundup: 03 Oct 2023
Asia-Pacific stocks traded higher on Friday, tracking advances in global peers, despite disappointing Caixin Services PMI data. Apple's after-hours slump on declining product revenues and soft Chinese performance did little to derail the momentum. European equity futures are indicative of a higher open, with the Euro Stoxx 50 up 0.5% after cash markets closed up by 1.9% yesterday. The US Dollar is softer and just above the 106 mark, while EUR/USD has extended gains further above 1.0600.
The ASX 200 rose again, helped by the surprise expansion in quarterly retail trade and continued easing of yields. The Hang Seng and Shanghai Composite also conformed to the broad upbeat mood, largely shrugging off weaker Chinese Caixin PMI data and another substantial liquidity drain by the PBoC.
FX The US Dollar (DXY) was marginally softer on Friday, following mixed US data releases that included a rise in jobless claims and a surprise decline in labor costs. The focus now turns to the looming Nonfarm Payrolls (NFP) report, which is expected to show an increase of 200,000 jobs in October. The Euro (EUR/USD) was steady after recently reclaiming the 1.0600 level. There were several comments from ECB officials, including Schnabel, who refused to close the door to further rate hikes. GBP/USD remained near the 1.2200 level, which was a focal point during yesterday's post-BoE swings. USD/JPY was uneventful with trade constrained amid the absence of Tokyo participants for Culture Day. The AUD and NZD currencies were rangebound in the pre-NFP twilight hours but are on track for their best week in four months.
Fixed Income
10-year US Treasury (UST) futures traded sideways on Friday, taking a breather from the prior day's advances and notable flattening. Participants awaited the key US jobs data, while price action was also hampered by the lack of overnight cash Treasuries trade due to the holiday closure in Tokyo.
Bund futures were steady, with price action stuck around the 130.00 level heading into the German trade data.
Commodities
Crude oil futures eked out marginal gains in risk-on trade and amid geopolitical flare-up risks. Russian Deputy Prime Minister Novak said there are no plans to lift restrictions on fuel exports from Russia yet, but added that liberalization will be possible when some volumes have nowhere to go. Kazakhstan's Energy Minister said 2024 oil output is seen at 90 million tons, while Kazakhstan is to export 4.5 billion cubic meters of gas to China this year and up to 11 billion cubic meters annually in the coming years.
Spot gold traded flat amid a quiet dollar and as participants braced for the NFP data.
Copper futures were underpinned alongside the broad global heightened risk appetite.
Looking ahead, the key highlights for Friday include:
German Trade Balance
EZ Unemployment
US NFP and ISM Services
Canadian Employment
Speeches from Fed's Barr and Kashkari
Earnings from BMW, Intesa Sanpaolo, Maersk, and QSR
Implications The resilience of Asia-Pacific stocks in the face of Apple's after-hours slump and disappointing Caixin Services PMI data suggests that investors are becoming more optimistic about the outlook for the global economy. The higher open expected in European equity futures also supports this view. The softer US Dollar and stronger EUR/USD are also positive for risk assets.
Additional notes:
The German Trade Balance is expected to show a surplus of EUR 7.4 billion in September, down from EUR 7.7 billion in August.
EZ Unemployment is expected to remain unchanged at 6.6% in September.
US NFP is expected to show an increase of 200,000 jobs in October, down from 263,000 jobs in September.
ISM Services is expected to show a reading of 52.3 in October, down from 53.2 in September.
Canadian Employment is expected to show an increase of 50,000 jobs in October, up from 23,000 jobs in September.
The speeches from Fed's Barr and Kashkari will be closely watched for insights into the central bank's thinking on inflation and monetary policy. The earnings releases from BMW, Intesa Sanpaolo, Maersk, and QSR could provide insights into the performance of the corporate sector and the broader economy.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team
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