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Markets Update: BOJ holds steady, Nikkei reversed decline
Today's important market events:
BOJ holds rate steady at -0.10%
[EUR] CPI (YoY - May) - 11:00 CEST
Global Markets Roundup: 16 June 2023
Asia-Pacific stocks traded higher on Thursday, following the gains on Wall Street on Wednesday. The major indices were lifted alongside a weaker dollar and softer yields.
BoJ Maintains Ultra-Easy Policy
The Bank of Japan (BoJ) refrained from any hawkish surprises and maintained its ultra-easy policy settings. The BoJ's decision was in line with expectations, but it did little to boost the Japanese yen, which remained under pressure from the stronger dollar.
European Equity Futures Higher
European equity futures are indicative of a slightly higher open on Thursday, with the Euro Stoxx 50 up 0.1% after the cash market closed down 0.3% on Wednesday. The positive sentiment in European markets is being driven by the prospect of a rate hike from the European Central Bank (ECB) later this month.
USD Contained, JPY Laggard The US dollar index (DXY) is contained following yesterday's heavy losses. The dollar is under pressure from the prospect of slower US economic growth and the continued strength of the euro. The Japanese yen is the laggard among the major currencies, as investors continue to bet on a widening monetary policy divergence between the BoJ and the ECB.
Australia: The ASX 200 was positive, with gains led by energy and utilities stocks. The gains were driven by AGL Energy's announcement of a jump in FY24 underlying profit, and by the prospect of higher electricity tariffs in the winter season.
Japan: The Nikkei 225 initially declined, but then recovered after the Bank of Japan (BoJ) refrained from any hawkish surprises and maintained its ultra-easy policy settings.
Hong Kong and China: The Hang Seng and Shanghai Composite indices were underpinned by anticipation of further support measures from China. However, gains were capped in the mainland amid lingering frictions with the European Union (EU) over the ban of Huawei and ZTE equipment from internal Commission networks, and after the United States tempered expectations of a breakthrough in relations ahead of U.S. Secretary of State Antony Blinken's visit to China.
European Markets
U.K.: U.K. equity futures were rangebound overnight, taking a break after the prior day's broad advances.
Europe: European equity futures are indicative of a slightly higher open, with the Euro Stoxx 50 up 0.1% after the cash market closed down 0.3% on Wednesday. The positive sentiment in European markets is being driven by the prospect of a rate hike from the European Central Bank (ECB) later this month.
Currency Markets
U.S. dollar: The U.S. dollar index (DXY) was contained following the prior day's heavy selling pressure. The selling pressure was due to a number of factors, including softer yields following Federal Reserve Chair Jerome Powell's press conference, a hawkish ECB, and a slew of data releases, including elevated jobless claims and soft import/export prices.
Euro: The euro was near its highest levels in over a month after the hawkish signals from the ECB. However, some sources suggested that there would be a tough debate next month regarding a September rate hike, and that several officials favored the expected July hike to be the last in the cycle.
British pound: The British pound held onto its recent gains, with a firm footing above 1.2700.Thegainsweresupportedbythedollar′sdemise.∗∗∗Japaneseyen:∗∗TheJapaneseyeninitiallycontinueditspullbackandbrieflydippedbelow¥140/, but then rebounded after the BoJ stood pat.
Fixed Income Markets
U.S. Treasuries: 10-year U.S. Treasury futures pared some of the gains from yesterday's bull steepening. The gains were spurred by a slew of data releases stateside, including the rise in initial jobless claims, and by money markets not buying into the Fed's dot plot peak.
German bunds: Bund futures remained subdued in the aftermath of the ECB rate hike and hawkish inflation projections.
Japanese government bonds (JGBs): 10-year JGB futures were supported following the BoJ's decision to maintain its ultra-easy policy settings, while the central bank also announced a second fixed rate operation for the day.
Commodity Markets
Oil: Crude oil futures were rangebound amid a lack of fresh catalysts to build upon yesterday's dollar and risk-fuelled advances.
**U.S. Deputy Treasury Secretary Wally Adeyemo said there is no immediate proposal to change the $60/bbl price cap on Russian oil now, and any change by Russia to taxes on oil sales will reduce the capacity of Russia's oil production over time. He added that the U.S. does not see widespread signs of evasion, but knows Russia is seeking ways to evade the price cap.
**Russia's Rosneft is close to striking long-term deals with trading firms to sell substantial supplies of oil to end users in China, India, and Turkey, according to Wall Street Journal sources.
Gold: Spot gold traded sideways near the prior day's highs after benefitting from recent dollar weakness.
Copper: Copper futures plateaued around their best levels in over a month amid anticipation of China stimulus.
Looking Ahead we have:
Eurozone CPI (Final)
US University of Michigan Sentiment Preliminary
ECB Repayment Publication
Speeches from Fed's Waller, Barkin & Bullard, ECB's Lagarde & de Guindos
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team
Opmerkingen