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Market Update: AUD Surges Ahead Following Unanticipated 25bp RBA Hike, with Focus Now on EZ HICP and ECB Bank Lending Survey
Today's important market events:
[EUR] German Manufacturing PMI (Apr) - 09:55 CEST
[GBP] UK Manufacturing PMI (Apr) - 10:30 CEST
[EUR] Eurozone CPI (YoY - Apr) - 11:00 CEST
[USD] JOLTs Job Openings (Mar) - 16:00 CEST
In the Asia-Pacific region, many regional participants have returned to the market after the long weekend, leading to a slight positive bias in APAC stocks trading. Notably, the Reserve Bank of Australia (RBA) has surprised markets by raising its rates by 25 basis points, with the central bank's language remaining hawkish. The Board expects that some further tightening of monetary policy will be necessary.
In Europe, equity futures indicate a mildly higher open, with the Euro Stoxx 50 up 0.2% after remaining unchanged on Friday. While the DXY is marginally softer, it is still holding above 102. Post-RBA, the Australian dollar is the clear outperformer, while EUR/USD sits on a 1.09 handle.
Here is a professional and streamlined version of the headlines and economic data:
Australia/New Zealand:
- The ASX 200 opened down by 0.1% at 7,325.
- According to ANZ/Roy Morgan, Australia's weekly consumer confidence increased by 1.8 points compared to the previous 0.8%.
- Australia is set to increase tobacco tax by 5% annually for the next three years.
- Qantas has announced that CFO Vanessa Hudson will be the next CEO and Managing Director to replace Alan Joyce when he retires in November.
- The Reserve Bank of New Zealand (RBNZ) reports that the country's banking system remains resilient as loans to households and businesses steadily reprice to higher interest rates.
China/Hong Kong:
- The Hang Seng opened up by 1.2% at 20,123.
- The Shanghai Composite was closed for the holiday.
- Hong Kong's Q1 GDP Y/Y increased by 2.7% compared to the previous -4.2%.
- Hong Kong is investigating a new monkeypox case, which is a close contact of the city's fifth confirmed infection.
- Finance Ministry and Central Bank officials from China, Japan, and South Korea have issued a joint statement recognizing the importance of strengthening economic and trade relations.
- China's Apr Vehicle Inventory Alert was 60.4, compared to the previous 62.4.
- The China Beige Book reports that new data offers the first evidence of a truly robust 2023 recovery (update).
Japan:
- The Nikkei 225 opened up by 0.5% at 29,278.
- The Bank of Japan (BOJ) offers to buy 5-10 year JGBs at a fixed rate of 50bps and opens a window to buy an unlimited amount of 10-year JGBs at 0.50%.
- Japan and South Korea's Finance Ministers have their first bilateral meeting since 2016.
- Japan's end-Apr Monetary Base Monetary Base was ¥680.4T compared to the previous ¥675.8T; Y/Y was -1.7% compared to the previous -1.0% (8th straight drop in y/y monetary base).
- President Biden will hold a trilateral meeting at the upcoming G7 with Japan's PM Kisiha and South Korea's President Yoon.
- Japan's three megabanks expect FY Net income to be about ¥2.5T.
South Korea:
- The Kospi opened flat at 2,501.
- South Korea's Apr PMI Manufacturing was 48.1 compared to the previous 47.6 (10th month of contraction, longest downturn in 6 years).
- The Bank of Korea (BOK) reiterates that headline inflation is likely to show a slowing trend through mid-2023 following Apr CPI data.
- Japan's Fin Min Suzuki hopes that both South Korea and Japan can continue with dialogue and contribute to bilateral relations.
- South Korea's Pres Yoon says that the alliance with the US expands to cover supply chains, industrial cooperation, science and technology, as well as Nuclear Consultative Group.
Other Asia:
- Taiwan's Apr PMI Manufacturing was 47.1 compared to the previous 48.6 (11th month of contraction).
- Thailand's Apr PMI Manufacturing was 60.4 compared to the previous 53.1 (16th month of expansion and a record high).
- The Philippines' Apr PMI Manufacturing was 51.4 compared to the previous 52.5 (19th month of expansion).
- Malaysia's Apr PMI Manufacturing was 48.8 compared to the previous 48.8 (8th month of contraction).
- Indonesia's Apr
Europe - European equity markets were closed on Mon, May 1st, for 'Labor Day'.
In the world of fixed income, 10-year US Treasury (UST) futures recovered from their recent decline, which was attributed to hawkish data and a substantial corporate supply driven by Meta's issuance of five-part USD 8.5 billion senior notes. Meanwhile, Bund futures opened lower this week following a holiday delay, slipping below the 135.00 level. 10-year Japanese Government Bond (JGB) futures, on the other hand, experienced a softening trend due to losses observed in global counterparts. Despite a recent enhanced liquidity auction, there was little demand to boost prices.
Turning to commodities, crude futures stabilized as concerns over weak Chinese data and a stronger dollar dissipated. Spot gold prices paused after briefly exceeding the USD 2,000/oz level in the previous session. Copper futures traded flat, reflecting a hesitant market mood in Asia and a public holiday in China.
Looking ahead, there are several noteworthy events, including the release of German Retail Sales, the EZ & UK Final Manufacturing PMI, EZ HICP (Flash), M3, US Factory Orders, JOLTS, New Zealand Unemployment, ECB Bank Lending Survey, Supply from Germany, and earnings from UniCredit, BP, HSBC, AMD & Pfizer.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team