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Markets Update: Mixed fortunes for Asia Pacific stocks as Nikkei scales new heights.
Economic Calendar
Global Markets Roundup: 15 Jan 2024
Asian equities remained largely rangebound on Monday, mirroring the lack of major newsflow over the weekend. The absence of fresh catalysts kept regional markets in a holding pattern. Taiwan's Presidential Election: Taiwan's ruling Democratic Progressive Party (DPP) candidate, William Lai, emerged victorious in the presidential election, albeit with around 40% of the vote. Notably, the DPP fell short of securing a parliamentary majority, leaving the political landscape in flux. Fed Watch: Atlanta Fed president Raphael Bostic, a voting member of the Federal Open Market Committee, injected a note of caution, suggesting progress on tackling US inflation may slow down. In an interview with the Financial Times, Bostic advocated for holding interest rates steady until at least summer, casting doubt on an imminent rate hike. Washington Update: US political uncertainty took a temporary backseat as congressional leaders reached a bipartisan agreement on a stopgap spending bill. The temporary measure will prevent a government shutdown and keep funding flowing until March 1st or 8th, allowing for further negotiations on a longer-term budget. European Outlook: European stock futures hinted at a positive open, with the Euro Stoxx 50 index looking to extend its Friday gains despite a slight dip in the previous session. FX Corner: The US Dollar Index (DXY) remained confined within a narrow range between 102.30 and 102.55. The Japanese Yen lagged behind other major G10 currencies, while EUR/USD hovered around the 1.0950 mark.
ASX 200 Stalemated: The Australian benchmark ASX 200 lacked clear direction, as gains in energy and telecommunications stocks were counterbalanced by losses in mining giants and defensive sectors. The index ended little changed from Friday's close.
Nikkei 225 Ascends: Riding a wave of optimism, Japan's Nikkei 225 continued its upward climb, briefly reclaiming the psychologically significant 36,000 level for the first time since 1990. The rally was fueled by a weaker yen and positive sentiment towards cyclical sectors. Hang Seng and Shanghai Comp Wobble: Both the Hang Seng and Shanghai Composite indices displayed choppy trading after the People's Bank of China (PBoC) refrained from cutting its key one-year Medium-Term Loan Facility (MLF) rate. While the decision met market expectations, some investors had seen a potential rate cut as a catalyst for further gains.
Forex:
DXY: The dollar index (DXY) held steady within a narrow range of 102.30-102.55, lacking fresh catalysts to spur movement.
EUR/USD: The euro (EUR/USD) vacillated near 1.0950, with last week's volatility failing to provide direction.
GBP/USD:Â Sterling (GBP/USD) saw limited activity due to a quiet weekend of UK news.
USD/JPY: The yen (JPY) weakened slightly, allowing USD/JPY to reclaim the 145.00 level as Japanese stocks outperformed.
Antipodeans: AUD/USD and NZD/USD traded mixed, impacted by cross-currency flows and PBoC's decision to maintain its Medium-Term Lending Facility (MLF) rate.
Fixed Income:
USTs: US Treasury futures (USTs) were lackluster, trading sideways in the absence of US cash markets.
Bunds: German Bund futures remained uneventful, devoid of significant European catalysts.
JGBs: Japanese Government Bonds (JGBs) continued their recent rally, buoyed by the Bank of Japan's (BoJ) purchase of around JPY 1.2 trillion worth of bonds. 2-year JGB yields briefly dipped back into negative territory, the lowest since July 2023.
Commodities:
Crude Oil: Crude oil futures were rangebound, with demand concerns countering the geopolitical risk premium.
Iraq's crude pricing: Iraq set February Basrah medium crude OSP lower for all destinations, reflecting market challenges. Its Oil Minister emphasized OPEC+'s efforts to stabilize the market.
LNG flows: Concerns over Houthi activity near the Bab el-Mandeb Strait led Qatar to pause LNG shipments through the vital waterway, according to Bloomberg.
Spot Gold:Â Gold (XAU/USD) posted marginal gains as the dollar remained subdued and US participants were absent.
Copper: Copper futures saw a modest recovery from last week's decline, but
Data Watch: Today's economic calendar features German wholesale price index and full-year GDP figures, alongside the full EZ trade balance and industrial production data. Later in the day, the Bank of Canada's Business Outlook Survey will be released. Notably, US markets are closed today for Martin Luther King Jr. Day. Looking Ahead: With major US markets out of action, global investors will keep their eyes trained on European data releases and ongoing geopolitical developments. The lack of fresh US catalysts may contribute to continued rangebound trading in Asia, with cautious optimism prevailing ahead of the next batch of US economic data due later in the week.
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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