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Markets Update: APAC Equities Surge Following Wall Street Momentum, Dollar Eases; Record Sell-off of Japanese Equities as Nikkei Dips Over 2%; PBOC Injects Substantial Liquidity into Chinese Markets; Asian Currencies Remain Strained; Trading of Evergrande Group Companies Halted; Market Focus Shifts to End-of-Week Inflation Data.
Economic Calendar
Global Markets Roundup: 29 Sep 2023
APAC stocks mostly rose on Friday, following Wall Street's positive lead as yields and oil prices declined from recent peaks. The US Senate bill to avert a government shutdown garnered enough votes to advance, as expected.
European equity futures are indicative of a contained open, with the Euro Stoxx 50 future flat after the cash market closed up 0.7% on Thursday. The US dollar index (DXY) tested 106 to the downside, with major peers trading on the front foot and antipodeans outperforming.
The ASX 200 was kept afloat by outperformance in the mining and materials sectors, but trade was constricted amid the quasi-holiday conditions. The Nikkei 225 failed to sustain early gains and pulled back from resistance around the 32,000 level, despite several encouraging data releases.
The Hang Seng outperformed as property and tech surged after the recent easing of yields and following further supportive measures by Chinese authorities. The index was unfazed by the absence of mainland participants and Stock Connect flows due to the Mid-Autumn Festival and next week's National Day holidays.
FX
The US dollar index (DXY) remained pressured and tested support at the 106.00 level after the recent easing of yields. The data releases stateside were mixed and the latest Fed rhetoric was predominantly neutral. Furthermore, attention turns to Core PCE data and the looming government shutdown deadline.
The euro (EUR) extended its rebound from a floor near the 1.0500 level amid a softer dollar.
The British pound (GBP) was firmer after it reclaimed the 1.2200 handle alongside strength in cyclical peers.
The Japanese yen (JPY) traded sideways despite the deluge of data releases, which were mostly encouraging.
The antipodeans outperformed amid the mostly positive risk tone, gains in some metal prices, and heading into next week's RBA and RBNZ meetings.
Japanese Finance Minister Suzuki said he does not have a defense line in dealing with FX moves and that the current FX moves suggest the yen's weakness has progressed.
Banxico kept rates unchanged as expected at 11.25% and repeated that it considers it will be necessary to maintain the reference rate at the current level for an extended period.
FIXED INCOME
10-year US Treasury futures were uneventful after the prior day's recovery momentum stalled at the 108.00 level. Participants now look to the Fed's preferred inflation gauge and the shutdown deadline.
Bund futures nursed some of the prior day's losses ahead of the latest eurozone inflation data.
10-year JGB futures were lower amid mild rises in Japanese yields. The late announcement of an unscheduled BoJ purchase operation only provided brief support.
COMMODITIES
Crude futures were rangebound and took a breather following their recent pullback.
UK treasury minister Penn said the efficacy of the Russian oil price cap must be kept under review.
The US President Biden administration's 5-year offshore oil plan will be released on Friday but does not include any sales for 2024 and will have no more than one auction in each of the final four years.
Spot gold traded sideways and failed to take advantage of the dollar's recent retreat.
Copper futures extended on the prior day's gains after benefiting from the risk appetite.
Key economic data and events to watch on Friday include:
German retail sales and unemployment rate
UK GDP
French, Italian, and eurozone CPI
US PCE
Chicago PMI
University of Michigan sentiment
Speeches from Fed's Barkin and Williams, and ECB's Lagarde
Earnings from Carnival Corp.
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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