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Markets Update: A Look into the APAC Markets: Mixed Equities, Range-Bound EUR/USD and More Data Releases in Focus.
Economic Calendar
Global Markets Roundup: 08 Jan 2024
Overview
Asia Pacific equities were mostly lower on Monday, extending losses from Wall Street's post-data whipsawing on Friday. The ASX 200 fell 0.65%, the KOSPI fell 0.77%, the Hang Seng rose 0.58%, and the Shanghai Composite rose 0.25%. The US dollar (DXY) was contained below 102.50, while the euro (EUR) traded on either side of 1.0950. The Japanese yen (JPY) was the marginal G10 outperformer.
Key Developments
US House Speaker Johnson Said Congressional Leaders Reached a Spending Level Deal in Which the Topline Figure for FY24 is USD 1.6tln. This news boosted sentiment in the US, but did not have a significant impact on other markets.
ASX 200 Declined as Initial Gains Were Overshadowed by Losses:Â The ASX 200 declined, as initial gains in energy, resources, and financials were overshadowed by losses in miners and tech. Hang Seng and Shanghai Comp Pressured Amid Shadow Banking Woes and Geopolitical Frictions:Â The Hang Seng and Shanghai Composite were pressured amid shadow banking woes and geopolitical frictions. The losses in Hong Kong were exacerbated by tech selling and as China Evergrande New Energy Vehicle shares slumped following the arrest of its vice chairman. European Equity Futures Down Slightly:Â European equity futures were indicative of a slightly lower open with Euro Stoxx 50 futures -0.2% after the cash market closed down by 0.2% on Friday.
Crude Oil Markets
Crude oil prices edged lower on Monday as risk sentiment soured and Saudi Arabia lowered its official selling prices (OSPs). Saudi Arabia cut its February light crude OSP to Asia by USD 2/bbl from January to a premium of USD 1.50/bbl over Oman/Dubai quotes, the lowest level in 27 months. The move is intended to boost sales to Asia, which is the largest buyer of Saudi crude. Saudi Arabia also set light crude OSP to NW Europe at a premium of USD 0.90/bbl over ICE Brent settlement and light crude OSP to the US at a premium of USD 5.15/bbl over ASCI. Qatar set February marine crude OSP at Oman/Dubai minus USD 0.75/bbl and set land crude OSP at Oman/Dubai minus USD 0.75/bbl. The drop in crude prices was also exacerbated by a force majeure declaration by Libya’s NOC in the Sharara oil field. The field was closed by protesters on Sunday, and the NOC said that negotiations are ongoing to resume production as soon as possible.
Spot Gold
Spot gold marginally extended on Friday's pullback after failing to sustain the USD 2,050/oz level. The metal is struggling to find direction as investors weigh the risk of a global economic slowdown against the potential for central banks to tighten monetary policy.
Copper Futures
Copper futures attempted to nurse some of their recent losses after finding support at USD 3.80/lb. However, the recovery was limited by the deterioration in risk sentiment.
The metal is facing headwinds from concerns about the global economy and the ongoing supply chain disruptions.
Overall Outlook
Crude oil and copper prices are likely to remain volatile in the near term as investors continue to assess the risks to global growth and the outlook for central bank policy.
Key Takeaways
Crude oil prices edged lower as risk sentiment soured and Saudi Arabia lowered its OSPs.
Spot gold marginally extended on Friday's pullback but is struggling to find direction.
Copper futures attempted to nurse some of their recent losses but are facing headwinds from concerns about the global economy and the ongoing supply chain disruptions.
Looking Ahead
Traders will be closely watching the release of these data releases for further direction. The euro could benefit from stronger German industrial orders and trade balance data, while the yen could come under pressure from weaker Swiss CPI data.
German Industrial Orders & Trade Balance:Â German industrial orders are expected to rise in December, while the trade balance is expected to narrow.
Swiss CPI:Â Swiss CPI is expected to rise in December, but at a slower pace than in November.
EZ Sentix Index:Â The EZ Sentix Index is expected to rise in January.
US Retail Sales:Â US retail sales are expected to rise in December, but at a slower pace than in November.
US Employment Trends:Â US employment trends are expected to show further improvement in January.
Consumer Credit:Â US consumer credit is expected to rise in November.
Japanese All Household Spending & Tokyo CPI:Â Japanese all household spending is expected to rise in November, while Tokyo CPI is expected to remain flat.
Speech from Fed's Bostic:Â Federal Reserve Bank of Atlanta President Raphael Bostic is scheduled to give a speech on Monday.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team