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Markets Update: APAC Stocks Lower on US Headwinds; ASX 200 Pressured by Underperformance in Tech and Real Estate; European Futures Point Down;
Economic Calendar
Global Markets Roundup: 13 Oct 2023
APAC stocks were mostly lower on Friday amid headwinds from the US, while the region also digested softer-than-expected inflation and mixed trade data from China.
European equity futures are indicative of a lower open, with the Euro Stoxx 50 future down 0.3% after the cash market closed down 0.1% on Thursday.
The US dollar index (DXY) remains on a 106 handle, while EUR/USD lingers around 1.0550 and GBP has reclaimed 1.22 versus the USD. The US is considering closing a loophole that gives Chinese companies access to American AI chips via units located overseas, according to Reuters sources.
The ASX 200 pressured by underperformance in tech and real estate, as well as rising yields. Markets were also reflecting on the latest gauges into the economic health of Australia's largest trading partner, China.
The Nikkei 225 traded negatively, but price action was choppy and downside was stemmed as Japan plans to release an economy security plan to protect vital industries like semiconductors. Index heavyweight Fast Retailing was boosted by earnings.
The Hang Seng and Shanghai Composite were lower, with tech the worst hit in Hong Kong amid broker downgrades and reports that the US is considering closing a loophole that gives Chinese companies access to American AI chips via units located overseas. Chinese inflation data also underwhelmed, with consumer inflation flat and factory gate prices at a deeper-than-forecast decline. Participants also digested mixed trade data, in which exports beat expectations but remained in contractionary territory.
FX
The US dollar index (DXY) was rangebound on Friday, taking a breather after it recently rose back above 106.00 in the aftermath of the firmer-than-expected headline CPI data and as yields climbed following a dismal 30-year bond auction.
EUR/USD attempted to nurse some of its losses, although the recovery lacked any meaningful strength after yesterday's slide to beneath the 1.0600 handle.
GBP/USD mildly rebounded from the prior day's lows and just about reclaimed the 1.2200 status.
USD/JPY plateaued after advancing closer towards the 150.00 level on yield differentials.
AUD and NZD were uneventful amid the mixed Chinese data releases and ahead of tomorrow's New Zealand election, where polls suggest a change in government.
The PBoC set the USD/CNY mid-point at 7.1775 vs exp. 7.3179 (prev. 7.1776).
FIXED INCOME
10-year US Treasury futures moved off the prior day's low with some reprieve from the prior day's selling, although they have far to go to clawback the losses triggered by the US CPI data and dismal 30-year auction.
Bund futures remained subdued and languished near yesterday's trough beneath the 129.00 level.
10-year JGB futures tracked recent selling from global peers and with prices not helped by the lack of additional BoJ purchases.
COMMODITIES
Crude futures kept afloat but with gains limited by the risk-off mood and after recent price swings.
Russian Deputy PM Novak said restrictions on fuel exports will be further eased if necessary, and that Russian gas supplies to Europe have fallen by around two-thirds.
The G7 Communique said they will closely monitor price caps on Russian crude oil and petroleum products and take necessary enforcement measures.
Spot gold partially nursed some of the post-CPI losses, which were mostly due to dollar strength.
Copper futures were contained after yesterday's selling pressure and mixed Chinese data.
Key economic data and events to watch on Friday include:
Eurozone Industrial Production
US Trade Balance
University of Michigan Inflation Prelim
Speeches from Fed Governor Patrick Harker and ECB President Christine Lagarde
Earnings from UnitedHealth, JPMorgan, BlackRock, Wells Fargo, Citi, PNC Financial Services, and Progressive 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