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Markets Update: APAC Stocks Decline Amid US-China Tech Clash, Disappointing Japanese GDP Revisions
Economic Calendar
Global Markets Roundup: 08 Sep 2023
Asian stock markets declined on Friday amid renewed tensions between the United States and China over technology, as well as disappointing revisions to Japanese GDP.
The Nikkei 225 in Japan fell by 1.2%, the Hang Seng Index in Hong Kong fell by 1.1%, and the Shanghai Composite Index in China fell by 0.8%.
The sell-off in APAC stocks was driven by concerns that the US-China tech war could escalate, as well as the weak Japanese GDP data. The Japanese economy grew by just 0.1% in the second quarter, below expectations of 0.4%.
Fed's Logan Says Rate Hike May Be Deferred
Meanwhile, Federal Reserve Governor Christopher Waller said that it could be appropriate to defer a rate hike in July, but that it does not mean that the central bank will stop raising rates.
Waller's comments came after a speech by Fed Governor Lael Brainard, who said that the central bank is "strongly committed" to bringing inflation down to its 2% target.
European Equity Futures Rise European equity futures are pointing to a slightly higher open, with the Euro Stoxx 50 future up by 0.1%. The gains in European futures are being supported by the weaker US dollar.
The Australian stock market (ASX 200) was led lower on Friday by continued underperformance in the commodity-related sectors, such as energy and mining. The index was also weighed down by strike action beginning in some offshore LNG platforms. However, losses in the index were stemmed by resilience in defensive sectors, such as healthcare and utilities.
The Japanese stock market (Nikkei 225) fell below 33,000 on Friday, as risk appetite was sapped by disappointing GDP revisions and slower wage growth. The index was also weighed down by concerns about the global economic outlook.
The Hong Kong stock market (Hang Seng) was closed on Friday due to severe rainfall.
The Chinese stock market (Shanghai Composite) traded subdued amid tech frictions. China is reportedly seeking to expand its iPhone ban, and the US Commerce Department is investigating the ‘made in China’ Huawei chip.
FX
The US dollar (USD) weakened against its major counterparts, as investors weighed the possibility of the Federal Reserve (Fed) pausing its rate hiking cycle in July.
The euro (EUR) rose to above 1.07 against the USD, after briefly slipping below the 1.07 level in the wake of dismal German data.
The British pound (GBP) also benefited from the weaker USD and attempted to reclaim the 1.25 level.
The Japanese yen (JPY) was choppy, as investors weighed the risk-off mood against the Bank of Japan's (BoJ) commitment to maintain its ultra-loose monetary policy.
The Australian dollar (AUD) and New Zealand dollar (NZD) rose against the USD, as they were supported by the weaker greenback and higher commodity prices.
FIXED INCOME
US Treasury yields continued to rise, as investors continued to price in the possibility of more aggressive rate hikes from the Fed.
German bund yields also rose, ahead of the European Central Bank's (ECB) meeting next week.
Japanese government bond (JGB) yields rose, as the BoJ continued to purchase JGBs in the market.
COMMODITIES
Oil prices extended losses, as investors weighed the possibility of a global economic slowdown.
Spot gold prices rose slightly, as the weaker USD provided some support.
Copper prices fell, as investors remained cautious about the global economic outlook.
Looking Ahead Key economic data releases to watch on Friday include German CPI (Final), Canadian Employment, and Chinese Money Supply. Central bank speakers to watch include Fed Governor Raphael Bostic and Fed Governor Michelle Bowman.
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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