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Markets Update: APAC Stocks Mixed, RBI Keeps Rates Steady; US Stocks Little Changed Ahead of Key Jobs Report
Economic Calendar
Global Markets Roundup: 06 Oct 2023
APAC stocks traded mostly higher on Friday, although some of the upside was capped following the inconclusive performance on Wall Street. The Reserve Bank of India (RBI) kept the Repurchase Rate unchanged at 6.50%, as expected. European equity futures are indicative of a higher open, with the Euro Stoxx 50 future up 0.3% after the cash market closed flat on Thursday.
The US dollar index (DXY) is steady just below 106.50, while EUR/USD hit resistance at 1.0550 and USD/JPY remains sub-149. ECB Governing Council member François Villeroy said the increase in bond yields may be excessive but it is helping to tighten financing conditions.
ASX 200 leading the gains. The top-weighted financial sector was boosted by the latest RBA Financial Stability Review, which noted increasing global financial stability risks but also stated that Australian banks are well-capitalised and well-positioned to manage any increase in mortgage arrears and absorb loan losses.
The Nikkei 225 was choppy as better-than-expected household spending data was offset by slower wage growth. Former BoJ official Momma said the BoJ will likely discuss whether to tweak forward guidance along with YCC at the end-October meeting.
The Hang Seng outperformed amid strength in tech, property, and banking stocks. Sentiment was also underpinned by hopes of a stabilization in US-China ties, as the White House is reportedly planning a Biden-Xi meeting in California next month, although nothing has been confirmed yet.
US stocks were little changed on Friday, with trade choppy ahead of Friday's key jobs report and amid a bout of central bank comments. The recovery in bonds continued and oil prices extended on their recent slide. The S&P 500 closed down 0.13% at 4,258, the Nasdaq Composite closed down 0.36% at 14,723, the Dow Jones Industrial Average closed down 0.03% at 33,119, and the Russell 2000 closed up 0.14% at 1,731.
FX DXY was rangebound heading into the key US jobs data and after the prior day’s selling pressure which coincided with softer yields, while the latest Fed rhetoric suggested the recent upside in yields has tightened financial conditions and reduced the need for Fed rate hikes. EUR/USD marginally eased back after hitting resistance around the 1.0550 level. GBP/USD was slightly off the prior day’s best levels after stalling just shy of 1.2200. USD/JPY eked mild gains but remained below 149.00 with price action choppy after mixed data. AUD and NZD lacked firm direction amid the absence of pertinent data releases and with the downside cushioned by the mostly positive risk environment.
FIXED INCOME 10yr UST futures took a breather following a 2-day recovery with participants lacking commitment ahead of the key jobs data and after the latest bout of Fed rhetoric. Bund futures held on to the prior day’s gains after climbing above the 128.00 level. 10yr JGB futures were kept afloat in tandem with peers and after softer-than-expected wage growth.
COMMODITIES Crude futures were rangebound and hovered near the prior day's lows as the recent selling pressure put oil prices on course for their worst weekly loss in more than six months. Russian President said Russia is still ready to supply gas to Europe via the Nord Stream 2 pipeline as one of its two lines is not damaged and only Germany has to decide on that. Spot gold eked mild gains but with upside capped amid an uneventful dollar. Copper futures were slightly firmer alongside the predominantly constructive mood. China Mineral Resources Group is reportedly in talks with BHP, Rio Tinto, Fortescue and Vale regarding next year's iron ore supply.
Key economic data and events to watch on Friday include:
German industrial orders
French trade balance
Italian retail sales
US non-farm payrolls and Canadian employment
Speech from Fed Governor Christopher Waller.
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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