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Markets Update: Asia-Pacific stocks traded mixed on Friday
Today's important market events:
[GBP] Retail Sales (MoM - Apr) - 08:00 CEST
actual at 0,5%
[USD] Corde Durable Goods Orders (MoM - Apr) - 14:30 CEST
[USD] Core PCE Price Index (MoM - Apr) - 14:30 CEST
Global Markets Roundup: 26 May 2023
Asia-Pacific stocks traded mixed on Friday, following the mild positive bias stateside where the tech sector surged on Nvidia's blockbuster report.
The Nikkei 225 outperformed, rising 0.7%.
US equity futures were rangebound, with the S&P 500 futures up 0.1%.
European equity futures were indicative of a flat open, with the Stoxx 600 futures up 0.1%.
US President Biden and House Speaker McCarthy are said to be near a deal that would raise the debt ceiling for two years and cap spending.
However, House Speaker McCarthy said there was no agreement on Thursday and he will stay at the Capitol to continue to work this weekend.
Asia-Pacific markets were mixed on Friday
In Australia, the ASX 200 was indecisive, with price action rangebound and risk sentiment contained by disappointing Retail Sales data.
In Japan, the Nikkei 225 outperformed and reclaimed the 31,000 level, with the index lifted by recent currency weakness and mostly softer-than-expected Tokyo CPI. Tech stocks also benefitted from the ripple effect which stemmed from the rally in US counterparts.
In China, the Shanghai Composite was subdued amid the closure of Hong Kong markets and Stock Connect trade. However, the downside was cushioned after the meeting between the US and China’s commerce chiefs, where concerns were raised about recent actions taken against US companies in China, as well as US chip policy and export curbs.
US equity futures were rangebound, with participants awaiting further development in the debt ceiling negotiations and ahead of the release of the Fed's preferred inflation measure, the Core Personal Consumption Expenditures (PCE) Price Index, scheduled for release later today. European equity futures were also indicative of a flat open.
In the foreign exchange market, the US dollar index (DXY) marginally softened overnight but held on to most of its recent gains after printing a two-and-a-half-month high above 104.00 following a clean sweep of forecast-beating data releases which contributed to a shift in pricing towards a 25bps Fed hike next month.
The euro (EUR/USD) attempted to nurse some of its losses but with the rebound limited after yesterday’s weak German data.
The British pound (GBP/USD) was off the prior day’s lows although lacked any meaningful strength and largely ignored comments from Bank of England (BoE) policymaker Jonathan Haskel who noted that further UK rate rises cannot be ruled out.
The Japanese yen (USD/JPY) slightly pulled back after its brief incursion above 140.00 which coincided with moves in US yields.
In the fixed income market, US Treasury yields were little changed after having bear-flattened to their most inverted since mid-March as strong data and debt ceiling progress placed the onus back on the Fed.
German bund yields were subdued after the recent sell-off and hawkish comments from European Central Bank (ECB) Governing Council member Klaas Knot but with a floor around 133.00.
Japanese government bond (JGB) yields were pressured on spillover selling from global peers and amid the lack of additional Bank of Japan (BoJ) purchases which instead offered to purchase commercial paper from May 31st, although losses were stemmed after mostly softer-than-expected Tokyo CPI data.
In the commodity market, crude oil futures were lacklustre after yesterday's slide owing to the headwinds from a firm dollar and comments from Russia's Deputy Prime Minister Alexander Novak who initially downplayed prospects of an OPEC+ output cut but has since stated that the group could make a decision at the June meeting.
Novak said Russia and OPEC+ partners will decide on what is best for the oil market, while he added that OPEC+ can make a decision at the June meeting if necessary and that Russia will participate in OPEC+ talks.
The Iraqi Oil Ministry said discussions with Saudi companies including Aramco about gas and oil investments have not reached a final agreement.
Spot gold marginally recovered as the greenback took a breather from its recent advances.
Copper futures notched mild gains in the aftermath of the firm US data and debt ceiling progress.
Looking ahead, highlights include:
UK Retail Sales
US PCE Price Index
Durable Goods
Speeches from ECB's Lane, Enria & RBNZ's Orr
Supply from the UK
Overall, the outlook for markets is positive, with investors cautiously optimistic about the potential for a deal to be reached on the debt ceiling. However, there is still some uncertainty, and investors will be closely watching developments over the weekend.
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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