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Markets Update: Navigating Mixed APAC Markets Amid Geopolitical Tensions and Chinese Data: Insights from Friday Morning Coffee Update.
Economic Calendar
Global Markets Roundup: 12 Jan 2024
Asian stocks closed mixed on Friday, with major indices largely rangebound amid geopolitical concerns and mixed Chinese data. Geopolitical tensions were heightened by a joint US-UK airstrike against Houthi targets in Yemen, although economic releases offered some solace. Chinese trade data emerged brighter than expected, with both exports and imports topping forecasts. However, inflation figures presented a mixed picture, declining year-on-year but defying expectations with a slight month-on-month uptick. European markets look set for a positive opening, with Euro Stoxx 50 futures up 0.7% despite a 0.6% decline in the cash market yesterday. This sentiment may be buoyed by the improved Chinese trade data and the lack of major negative news overnight. In currency markets, major pairs remained largely contained. DXY stayed within tight parameters, EUR/USD continued to face resistance at 1.10, and USD/JPY held its ground near the 145 handle.
ASX 200 was subdued as strength in commodity-related sectors was offset by weakness in defensives. Nikkei 225 continued to rally and is up over 6% this week with gains helped by strong earnings from top-weighted Fast Retailing. Hang Seng and Shanghai Comp struggled for direction despite the latest Chinese trade data which either improved or topped forecasts although 2023 USD-denominated exports contracted for the first time since 2016, while the Chinese inflation figures were mixed but ultimately deflationary on a Y/Y basis.
FX:
DXY Steady: Dollar steadied within a tight range (102.18-102.32) after yesterday's whipsaw on US CPI data. Attention shifts to upcoming PPI figures.
EUR/USD Edges Up: Euro inched higher, but remained below 1.1000 resistance.
GBP/USD Gains Modestly:Â Pound extended yesterday's rebound as investors await UK GDP and output data.
USD/JPY Tests Support: Dollar tested 145.00 support against yen, while JPY-crosses received a brief boost from continued stock rally.
AUD and NZD Strengthen:Â Aussie and Kiwi firmed after mixed Chinese inflation data and encouraging trade figures.
PBoC Sets Mid-Point: CNY midpoint set at 7.1050, weaker than expected.
Peru Cuts Rates: Central bank cuts rate by 25 bps to 6.50%, as anticipated.
Fixed Income:
USTs Breathe Easy: Treasuries paused after yesterday's volatility following CPI data. Curve steepened as duration lagged in a successful 30-year auction.
Bunds Hold Gains:Â German bonds maintained yesterday's rise after rebounding from 135.00 support.
JGBs Supported: BoJ considering lowering FY24 price outlook propped up bonds, despite mixed 30-year auction results.
Commodities:
Crude Boosted by Geopolitics:Â Oil prices supported by risk premium after US/UK strikes in Yemen and Iran's tanker seizure.
Russian Discount Widens:Â US official reports a 40% increase in Russian oil discount since enforcing price cap.
Gold Gains Capped:Â Metal edged higher but capped after mixed market reaction to US CPI data.
Copper Afloat on China Data:Â Chinese trade data and strong steel/iron ore imports kept copper afloat.
The data calendar for today is packed, featuring highlights like UK GDP, Output data and Trade Balance, French and Spanish CPI (Final), US PPI, and speeches from ECB's Lane and Fed's Kashkari. Additionally, earnings season continues with reports from financial giants like UnitedHealth, JP Morgan, BlackRock, Wells Fargo, Citi, BofA and Delta Airlines. These releases and events are likely to drive market sentiment and volatility throughout the day.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team